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Government Wants Money for Perceived Government Support?   July 13th, 2009
Government wants Bank of America to pay for perceived assurance       

 
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Should a company have to pay money to the U.S. Government because the public perceives that the government has agreed to back it? Apparently the U.S. Treasury thinks so.

Bank of America (BAC: 12.73, 0.88, 7.43%) is trying to avoid paying a multibillion-dollar fee the U.S. Treasury says the bank owes for guarantees against losses at Merrill Lynch, Bloomberg News reported on Monday.

BofA contends that the agreement was never signed and the funding never used, while the government says BofA owes at least part of a $4 billion fee agreed to in January, even without a completed legal document, because the bank benefited from implied backing on $118 billion of Merrill Lynch assets, according to Bloomberg.


This is just amazing. Bank of America never signed a legal document but the U.S. Treasury wants to collect money from Bank of America for perceived backing. The government, not happy that a bank was actually strong enough not to need to use that backing, actually wants to charge a bank for an assurance that was never legally established.

It's amazing that the Obama Administration wants Americans to trust the government to solve energy problems and alleged emission problems, and to even trust government with our very lives through socialized medicine... yet even the slightest hint of an association between a private company and the U.S. Government is sufficient for the administration to try to reach into the pockets of that private company and try to score some money.

This comes after revelations that the Federal Reserve may have bullied Bank of America into acquiring Merrill Lynch. Bank of America eventually did acquire Merrill Lynch and now the U.S. Government wants to charge it money for perceived assurances regarding potential losses at the company the government bullied Bank of America into buying.

This is why conservatives are opposed to big government. This is why conservatives believe that government is over-reaching. And this isn't the government "partnering" with the private sector. This is government abusing the private sector.

We don't need more government in the business of bullying and extorting the private sector. We need less government.

And if you're in the private sector, the actions of the Obama Administration over the last six months makes it very clear that you should do everything to steer clear of working with or associating with the government. It gives them an excuse to reach into your pockets even if you don't sign on the dotted line.

Heck, even the general Hollywood portrayal of a deal with the devil suggests that at least the devil requires a signed document.

But not the U.S. Government.

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