Government Already Overpaid By $78 Billion In Bailout Money

from the transparency? dept

Well here's a quick, but depressing one. As politicians are still debating the stimulus package, the head of the Congressional Oversight Panel for the TARP bailout funds is admitting that we, the taxpayers, appear to have already paid $254 billion for assets that appear to be worth $176 billion. That's a shortfall of $78 billion that may have just gone up in smoke, effectively. Now, it may eventually happen that the assets we now own appreciate in value, and that money is made back, but this is the key problem with just having the gov't jump into "buying" bad assets. It's almost guaranteed that they're going to overspend. If that doesn't make you uncomfortable about what sort of mess we're going to get with the stimulus package, I don't know what will. The government isn't just throwing money at a problem that might not need money -- it's doing it badly. On a historic level.
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Filed Under: bailout, overspending, tarp, transparency

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  1. identicon
    Chris, 6 Feb 2009 @ 9:04am


    Wasn't the entire point of the bailout to buy these bad assets at more than they are worth? If we paid the banks the actual value of the assets, they'd still be insolvent; that's the entire problem. So we're bailing them out by buying up these assets for more than they are actually worth.

    I'm not saying it's a good idea, but it's not like this should have come as a surprise. Honestly, the sensationalism at Techdirt is getting worse and worse lately.

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