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Published On: Wed, Nov 11th, 2015

Ted Cruz: Does he believe in bailouts or not?

While the talking heads continue to praise the debating prowess of Sen Marco Rubio and Sen Ted Cruz, some of the details of what was said last night has been glossed over.

Ted Cruz donkeyhotey portrait photoI want to look at Ted Cruz’s views on bailouts of the banks, something the moderators should have scrutinized better. While the Texas Senator bashed Gov John Kasich over bailouts, this is what Cruz said about the topic when moderator, Neil Cavuto asked:

“I just want to be clear, if you don’t mind, that millions of depositors would be on the line with that decision. And I just want to be clear. If it were to happen again, for whatever the reason, you would let it go, you would let a Bank of America go”, Cavuto asked?

Cruz responded, “So let me be clear. I would not bail them out, but instead of adjusting monetary policy according to whims and getting it wrong over and over again and causing booms and busts, what the Fed should be doing is, number one, keeping our money tied to a stable level of gold, and, number two, serving as a lender of last resort.

“That’s what central banks do. So if you have a run on the bank, the Fed can serve as a lender of last resort, but it’s not a bailout. It is a loan at higher interest rates. That’s how central banks have worked.”

Is that not a bailout? Isn’t that a huge part of what happened in 2008?

In 2011, Bloomberg examined nearly 30,000 pages of documents concerning the financial crisis and found that the Federal Reserve gave $7.7 trillion in undisclosed loans to the banks and other financial institutions, astronomically more than the $700 billion Troubled Asset Relief Program [TARP]. They report that even the Bush administration or Congress wasn’t privy to the Fed loans.

And unlike the TARP funds, the loans came with virtually no strings attached for the banks. In fact, the six largest banks, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group, and Morgan Stanley, took in $13 billion in then undisclosed profits thanks to those loans and the Fed’s below-market rates.

Bailout or not? You be the judge.

Robert Herriman is a microbiologist and the Editor-in-Chief of Outbreak News Today and the Executive Editor of The Global Dispatch

Follow @bactiman63

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About the Author

- Writer, Co-Founder and Executive Editor of The Global Dispatch. Robert has been covering news in the areas of health, world news and politics for a variety of online news sources. He is also the Editor-in-Chief of the website, Outbreak News Today and hosts the podcast, Outbreak News Interviews on iTunes, Stitcher and Spotify Robert is politically Independent and a born again Christian Follow @bactiman63

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    […] Ted Cruz: Does he believe in bailouts or not? – If it were to happen again, for whatever the reason, you would let it go, you would let a Bank of America go”, Cavuto asked … what the Fed should be doing is, number one, keeping our money tied to a stable level of … […]

  4. Steve says:

    Yes, I noticed that same comment. What Cruz describes is clearly a bailout. I’m surprised this has been largely glossed over in the post debate coverage!

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