I have long felt that TARP was nothing less than an illegal treasury raid cooked up by Paulson & Co. for the express purpose of helping out their Wall Street buddies. I never bought into the notion that our financial system was on the verge of imminent collapse.
IG: Taxpayers May Lose Money on BailoutsThursday, September 24, 2009 1:21 PM
By: Dan Weil
Taxpayers may lose money on the $700 billion bailout engineered by the Treasury Department of the Bush and Obama administrations.
So says Neil Barofsky, inspector general of the bailout, formally known as the Troubled Asset Relief Program (TARP).
In testimony prepared for the Senate Banking Committee Thursday, Barofsky says the Treasury Department has ignored suggestions to improve the program’s transparency. And he says Treasury has never solved the vexing problem of disposing with the toxic assets that remain on banks' balance sheets.
"While several TARP recipients have repaid funds for what has widely been reported as a 17 percent profit, it is extremely unlikely that the taxpayer will see a full return on its TARP investment," Barofsky said in the remarks, as cited by The Wall Street Journal.
The Treasury’s attempt to use government aid to spark bank loans hasn’t worked, he says. Lending has actually dropped, despite the government’s injection of billions of dollars into the banking system.
To be sure, he acknowledges that lending would have plunged even more precipitously if the TARP program hadn’t been enacted.
Barofsky has clashed repeatedly with the Treasury over the program’s transparency.
"TARP largely remains a program in which taxpayers are not being told what most of the TARP recipients are doing with their money and will not be told the full details of how their money is being invested," Barofsky said.
While U.S. taxpayers may not make out so well in the financial buyout, some other investors have profited handsomely. Warren Buffett, for instance, has earned paper profit of $3 billion, or 60 percent, on the $5 billion investment he made in Goldman Sachs a year ago.
And Singapore’s sovereign wealth fund Government of Singapore Investment Corp. (GIC) announced this week that it gained a $1.6 billion profit by selling about half of its holdings in Citigroup.
© 2009 Newsmax. All rights reserved.
I hope to see an investigation someday into where our money went, who got it, and what it was used for, but I won't hold my breath waiting for it.
Personally, I think TARP is the largest and most egregious scam ever pulled off.