TARP money printed?

Just shooting a quick question for the fundie know hows. Unless I missed a key announcement my understanding was that the 700 Billion came from taxpayer money. I was just at a forex association meeting in houston where the presenter was explaining how every single penny of the TARP was actually printed money and was not backed by anything because no one was willing to pick up the tab. So, is the tarp money taxpayer money or was it printed in the hopes someone will back it up?

700 billion, but it's borrowed money. Most of it comes in the form of treasury bills that are purchased by ppl wanting short term investments. It's being done in stages tho.

What's more interesting is the federal reserve. It's lending money out w/o the ability to indebt the US. That money is essentially printed money. There's some concern it might cause inflation, but the fed is so worried about deflation right now due to the credit collapse that they're not really looking that far ahead.

Only time will tell.

Thank you. My confusion was exactly about that. If Tbills are issued to cover it, then they would be backed by the bills, right? this guys were saying basically that tbills or not, no one would buy them. They were referring specifically to china. Any more comments?

So where does the taxpayer comes into this equation?

Tbills have a redemption period and an interest payment. Every year the US gov't sets aside a portion of it's budget to repay interest, and basically rolls redemptions into future bonds.

09's budget is here:
http://www.gpoaccess.gov/usbudget/fy09/browse.html

People are buying them. Some are national buyers like China, others are institutional buyers, some are just your average small investor looking to stabilize their portfolio. There was a huge "flight to quality" as the market dropped. People bought record numbers of these things.

No guarantee that'll always happen, of course, but for now the US still has A rated credit.

The concern, naturally, is that as we take on more debt we'll find yourselves unable to continue meeting interest payments. This could especially be true if the economy tanked as bad as it did during the great depression. But that isn't looking likely at the moment.

If it did then the credit rating would go down. People would expect higher interest rates in return, or they'd stop buying them in favor of less risky investments.