A glamorous banking deal

Henry Thompson

 

The Secretary of Treasury is responsible for paying the bills of the US government, not a glamorous job.  If tax revenue falls short of government revenue, the Secretary selling Treasury bonds to raise cash.  During the recession of the late 2000s ex-Secretary banker Tim Geithner came up with a “glamorous” idea to stimulate the economy.  Geithner bought bonds from his banking colleagues who then lent the funds at higher interest rates.  Geithner provided his buddies cash and insurance guaranteeing no more than 5% loss on any loans they made with the cash!  Taxpayers provided cash as well as subsidized insurance for the banks, a glamorous deal indeed.