Can I apply for some of that TARP Repayment?

Goldman Sachs and Morgan Stanley are making news by announcing they want to pay back TARP. American Express, JP Morgan, and others have also announced their desire to be free from the TARP burden. Twelve smaller banks have returned nearly $1.2 billion in government money so far.

Could these funds REALLY be coming back to the federal government? Awesome! After all, most of these banks really never wanted to be under the thumb of the government anyways. They are all lending money, and have (for the most part) actually made a profit in the past 90 days (if you believe everyone's first quarter announced results).

So, some of that $700B is coming back to us, $10-20B at a time.

What to do with all that money? I have an idea. It's a little loopy, but why the heck not?

Let's say we get the first $350B back...Why not use those funds to dole out to any taxpayer who filed returns last year? Heck, we could give $1,000 to every US citizen right now, and tell them to do with it whatever they please. Most will probably use it to pay down debt, but that's not necessarily a bad thing, given the credit issues we are currently facing. If the average family has $8k in debt, we could have just cut the household debt in half. Others may spend it on things like...washing machines...new televisions, ipods, trips to Vegas (perhaps a trip to Albany, or Kansas City would be more sensible these days. KC-Mo, not KC-K, of course).

If the banks are truly "on their way" to solvency, and profitability, then the other $350B can be used to fight the deficit in our current fiscal policy. But it seems too easy to let the whole TARP repayment go right into some defense contract overrun, or bureaucratic overhead expense.

President Obama should think about this as his "second stimulus" plan. Since I am not at all convinced that we are out of the woods yet on this current recovery, a plan to truly get us out of the hole should rest on two things: First, get the people of the USA into a more prudent debt position, and allow them to invest in the economy. That is the fiscal stimulus. Second, look at opportunities to get government back down to size, in relationship to the taxes and spending ledgers. Stimulus is used to generate a robust economy. Once the economy is moving, we have to be mindful of our promises to our people--Social Security and medicare. We need to make good on promises, or we need to figure out a way to rewrite the rules that everyone can agree on.

Even Geithner has said that governments fail when they don't do enough, fast enough. Here's an opportunity to take some of our recent economic success, and parlay it into a real economic boon. But first, let's get the TARP money back, and then we can start using it on our people's fiscal health. Got a better idea? I'm listening...