Congressman Dennis Kucinich, a democrat, has raised some interesting questions about TARP money currently residing in the Federal Reserve. What was the intent of TARP in the first place? Was it intended to free credit for small business to stimulate the economy and jobs? Was it to cover toxic assets? Was it to keep people in their homes? A good guess would be all of the above.

Kucinich raises the question of whether " the Fed is paying higher interest rates on term deposits in order to induce banks to keep money at the Fed rather than lend...” The Congressman observes, ""I think the vast majority of Americans would be outraged to learn their tax dollars were facilitating hoarding at the Fed and increased profit making for banks,”

This sounds like a great deal for banks and bankers if Kucinich's concerns are correct. Coincidental, if my memory serves me correctly, profits for banks were up in the last quarter.

http://www.clarksvilleonline.com/200...oney%E2%80%99/

I know that the processes that govern banking are extraordinarily complex. That point was made extremely well in earlier posts. Kucinich cites this Bloomberg report,

Meanwhile, banks’ excess reserves at the Fed rose to a record $877.1 billion daily average in the two weeks ended May 20, from $2 billion a year earlier. Excess reserves — money available for lending that banks choose to leave with the Fed instead — averaged $743.9 billion in the first two weeks of this month. – Bloomberg.com

The facts seem to contradict Henry Paulson's hand-ringing admonition about the urgency of the bailouts. It appears that a substantial part of the $700+ billion in bailout funds still quietly resides in the Federal Reserve, distribution priorities seem to shift consistent with the latest crisis and apparently most banks are content to keep the funds at the Fed.

Do banks profit off the back of taxpayer dollars from this position? I really don't know but it raises suspicions.