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
    Al Otto, 7 Feb 2009 @ 2:32pm

    Government Already Overpaid By $78 Billion In Bailout Money

    Of course we are over paying. The reason is we are paying from the top down as apposed to bottom up. The official reason given was labeled as toxic mortgages, these were all bundled into security investment packages and were offered to select markets, only large banks and large insurance companies. It is here where the problem really begins. The TARP paid these companies holding the toxic mortgages. No one knows or even cares to know if only the value of the toxic mortgages were paid for by the FED$ of if the TARP funds went to pay the total investment of this worthless paper/investment.

    Regardless the FED$ paid what they did. Only thing to ask now is why are these note/mortgages still on the books at the point of origin? All of the Toxic Mortgages are still on the books at your local banks. And this is one of the causes of the credit crunch we face now. Banks aren't permitted to borrow FED$ dollars when they hold foreclosed notes. If this is not address the TARP will by times end pay three to fours times of the total toxic mortgages on the market. The FED$ aren't smart enough to see this. Or is it because the American people are just so stupid and filled with apathy that the FED$ count on their stupidity

    I think its both. but hey. what do I know right!
    AL Otto

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