Editorial on GAO report about TARP

From the Washington Examiner, 10/23:

"Measuring the effectiveness of TARP's programs has been an ongoing challenge," the GAO report said, adding that "any changes attributed to TARP could well be changes that would have occurred anyway" -- due to policy interventions, the actions of financial regulators or even natural market corrections. In other words, a year after Congress burdened present and future taxpayers with a debt of immense magnitude, government auditors still can't say for sure that TARP accomplished anything toward preventing a financial collapse.

At the height of the bailout hysteria, Paulson appeared on "Face the Nation," saying he hoped the federal government would be able to recoup most of the TARP funds. But today, both the GAO's auditors and TARP Inspector General Neil Barofsky say nobody should hold their breath waiting for that repayment.

In his 256-page report to Congress, Barofsky notes that the Treasury Department's failure to implement anti-fraud measures, or even to require TARP recipients to report how they used the billions Congress and the Treasury Department gave them, makes it highly unlikely that the $317 billion outstanding -- nearly half the TARP total -- will ever be returned to taxpayers. Barofsky also threatened to subpoena documents relating to the Treasury Department's "less-than-accurate statements ... concerning TARP's first investments in nine large financial institutions," as well as its subsequent refusal to report what hundreds of other TARP recipients did with the funds.

Boy, what a surprise.

Comments

[kyle8]

My own view is that the immediate bailout was needed and did stave off a cascading meltdown. However, it did NOT need to be as big as it was. There were several firms that were forced to take money that even they did not believe they needed. We could have probably gotten by with a tarp about one third the size.

And as for the subsequent actions and the so called stimulus, all of that was just a colossal pork wish list for the Democrats and their constituencies.

[Clint]

I can't wait to see what happens to our healthcare!