An organization called Project on Government Oversight discovered the U.S. Treasury Department is letting big banks, and corporations, pay off their taxpayer funded loans with new taxpayer funded loans meant for small banks.

On paper it looks like big banks who took out TARP bailout loans are paying those loans off.  It turns out that many of those payoffs came from new loans also offered through the Treasury Department.

The new loans are being made with a program that was meant for smaller banks, to lend money to small businesses.  The program is called Small Business Lending Fund.

What this means is the U.S. Treasury is not really getting the taxpayer funded TARP bailout money back.  Instead the Treasury is allowing the big banks to rob Peter to pay Paul.  The problem here is that both Peter and Paul are one in the same, the U.S. taxpayer!

This isn’t the first time claims were made that TARP money was being paid back with loans.  In April 2010, Senator Charles Grassley, of Iowa, claimed that General Motors paid back their TARP loan, with another TARP loan: “It looks like [GM’s] announcement is really just an elaborate TARP money shuffle. The repayment dollars haven’t come from GM selling cars but, instead, from a TARP [escrow] account at the Treasury Department.”

Now the question is why can’t the big banks, and other corporations, pay back their taxpayer TRAP (I mean TARP) loans?  After all many have reported big profits. Is this a case of no real money left in the United States?