Death of My Money

Previously on this blog I have discussed the topic of the Government's investments. While I do not approve of many of the bailout programs, I have seen their impact. So when I goggled bailout I was interested to find the article "Where Bailout Money Goes To Die" by Rick Newman. I mean with a title like that how can you not read it?

The focus of this article is not to debate the impact of the programs. Its to follow the money and learn what we need to do in the future. Mr. Newman makes an interesting point in looking at the bailout from an investors point of view. Afterall the government is investing your tax dollars into these failing companies, so what return are you getting on that investment? I wish I could say that the bailout was a huge sucess and the government is getting a return of all the money invested, yet that really is not the case.

Tarp has had an impact on keeping several companies out of bankruptcy. Yet the spending for such a project is astronomical. And interestingly enough Tarp money has been centered on the Eastern seaboard. While I understand that this is the headquarters of many businesses and population It still seems unbalanced.

More unbalanced is the price that we may pay. I have listened to several people complain about Government spending, the theory being that you know where you want to spend your money. The same is true about investments. You know how much you are willing to risk on an investment. The government doesn't have the same ability to cut its loses and move on. In fact Mr. Newman points out that the government is not a suave investor since it has lost more that $148 billion to dying companies. This is $1233 per household. I understand the importance of continuing some bailout programs, but every single household in the United States does not have $1233 that can be thrown away on a bad investment. An investment that is only referred to as an investment my politicians. Since many companies have no guide lines as to how the money must be re-payed. An investment that does not even have the protection of stockholders, where what you put in is what you can lose.

So if you get the chance please read "Where Bailout Money Goes To Die" by Rick Newman. Every investor should be informed, and the article is more than a little funny. Additionally, http://bailout.propublica.org/ offers several trackers and graphs to view where the bailouts are going. Including the image above.