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Breaking the calculator

Scott Jagow Jul 20, 2009

The inspector general of TARP, Neil Barofsky, will tell Congress tomorrow what he figures the financial system rescue could cost taxpayers in the end. His report was released today, and you’re not going to like it. The bill might come to $23,700,000,000,000.

Barofsky says the original $700 billion TARP fund is just a fraction of the money that’s gone out the door. There’s $6.8 trillion from the Federal Reserve. The Treasury has 12 different programs that might cost $3 trillion. Let’s not forget the FDIC’s $2.3 trillion or the $7.2 trillion for Fannie Mae, Freddie Mac, credit unions, Veterans affairs, etc. When all is said and done, Barofsky says the bill could be $23.7 trillion.

Barofsky’s none too pleased with the accountability of this money either. From Bloomberg:

Barofsky offered criticism in a separate quarterly report of Treasury’s implementation of TARP, saying the department has “repeatedly failed to adopt recommendations” needed to provide transparency and fulfill the administration’s goal to implement TARP “with the highest degree of accountability.”

As a result, taxpayers don’t know how TARP recipients are using the money or the value of the investments, he said in the report.

There will be many squirming lawmakers when Barofsky testifies tomorrow. From ABC:

“The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just $1 trillion — $23.7 trillion is a staggering figure.”

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