If you think I am going to write good news about the Troubled Asset Relief Program (TARP), then you did not see the sarcasm in the title of this Blog entry.
CNN just ran a report on the testimony offered by Neil Barofsky, special inspector general for the treasury's financial sector rescue. In his testimony and supporting report, he states the bailout has several hidden costs. According to Barofsky, "the monetary loss will likely be substantial... the Congressional Budget Office estimates that the Troubled Asset Relief Program will ultimately cost taxpayers $159 billion." $159 billion... is that all?
Here is one point I got from the CNN staory that I want to share with as many people as I can. The treasury department has spent $467.1 billion so far on the bailout. A substantial portion of that borrowing was through issuing debt as treasury bonds. In his report, Barofsky indicates 46% of government expenditures in 2009 are related to that debt. In the past 10 years, the average of new debt issues was 9%. This clearly mirrors the steep increase in this year's deficit numbers.
Say it with me; HOLY COW!
Kudos to Mr. Barofsky. He shows more of a human side than most in Washington these days because his testimony includes the psychology of our financial troubles and the way our government is addressing them. From the CNN report, "Barofsky also said that the government's lack of transparency about the bailout could cost taxpayers in the long run, as a growing distrust of the government could impede its ability to enact important legislation."
Good point, Mr. Barofsky.