Treasury Scam

Henry Thompson

 

The Secretary of Treasury is responsible for paying the bills of the US government, certainly not the most glamorous job in the world.If tax revenue falls short of bills due, the Secretary borrows money by printing and selling US Treasury bonds as promises of future payment.During the recession of the late 2000s ex-Secretary Tim Geithner came up with a glamorous idea.Geithner bought bonds from banks who then lent the borrowed funds at higher interest rates.The Treasury not only provided cash but also insurance guaranteeing the banks no more than 5% loss on their loans.Risky market lending can be insured at a price.Under the Geithner plan US taxpayers provided cash and subsidized insurance to keep Geithnerís banking buddies in business.††††††