Treasury Is Criticized Over TARP (US Potential Exposure:$23.7 Trillion)

Wall Street Journal ^ | July 21, 2009 | MEENA THIRUVENGADAM

[lbryce]

The special inspector general overseeing the $700 billion financial-sector bailout said the Treasury Department isn't disclosing enough information about how taxpayer money is being spent.

In prepared testimony for a Tuesday hearing of the House Committee on Oversight and Government Reform, Special Inspector General Neil Barofsky said the Treasury has rejected several of his recommendations for more transparency on its part.

Mr. Barofsky also said the Treasury has declined to require bailout recipients to explain what they are doing with their government funds.

Mr. Barofsky estimates the government's potential exposure to programs aimed at resolving the financial crisis at $23.7 trillion. To get to that figure, Mr. Barofsky combined direct spending with all the government guarantees and programs and assumes the "gross exposure" the government could face if all the programs were tapped to their fullest potential. His report says "these numbers may have some overlap, and have not been evaluated to provide an estimate of likely net costs to the taxpayer."

The Treasury Department disputed Mr. Barofsky's estimate as "inflated." Treasury spokesman Andrew Williams said Mr. Barofsky's estimate "does not take into account the assets that offset the risk in these programs" and also doesn't reflect "fees and other charges that compensate the U.S. taxpayer for the risks incurred."

The Treasury Department recently posted on its Web site the dividend payments and interest it has received from companies getting government aid. That report shows that as of May 31, the Treasury received nearly $6 billion in dividend payments and just more than $200 million in interest payments.

Mr. Barofsky's report is likely to further fuel ire toward the government's bailout programs on Capitol Hill. Many lawmakers had already been pushing the Treasury to adopt Mr. Barofsky's recommendations.

[lbryce]

The matter of spending being out-of-control at a pace once deemed mind-boggling, hardly registers a ripple anymore. With the economy in the tank, unemployment at 9.5%, have we seen the worst?

The fact of the matter is we are financially, economically in uncharted waters. How the latest unprecedented excesses in profligacy,of money being thrown out, away, bereft of accountability, consideration to how it may all impact our future is one no one seems to have the testicular fortitude to address.

[GeronL]

It is insane to even think this way