Diane Sawyer Government TARP Loss Equals Profit
By Alonzo Hosford
Diane Sawyer business math for Government computes a loss as profit on ABC News 9/2/09.
$4 Billion Profit excludes National Debt 6% Interest To Raise $205 Billion Borrowed
This amateurish analysis lacks depth and basic business math skills.
The set’s TV screen on outset of the piece shows “Follow The Money”. But how far was the money followed? Not as far as to compute profit or loss.
The information presented neglects the cost of the US borrowing the money for Tarp at 6% from other nations such as China. Subtract about $10 Billion for interest for about 9 months.
Then subtract the administrative overhead to create the legislation such as lawyers hired to write it who are not the low end of the US wage scale. Take out the administrative costs needed to manage Tarp.
Now we have a loss except for one item a business lending the money has that the Federal Government does not. That is income tax on any profit. But maybe not. The loss gets added to the National Debt that continues to accrue interest. That interest eventually requires private sector profit to be taxed.
Diane confuses Government as a profit entity. Government is a profit consumer.
Playing on the words of CNBC Jim Cramer WE EARNED NOTHING! NOTHING!
This lack of the simple business math is why Government and TV slugs do not run a business. Here is the formula for the business wizards at ABC News:
Income – Costs (ALL OF THEM) = profit or loss.
Simple rule to remember ABC: Government it is always ALWAYS a loss and never a profit. It just cannot because it creates no wealth, just uses it or confiscates it.
