TARP Inspector General Debunks His Own False $23 Trillion Bailout Estimate
TARP Inspector General Debunks His Own False $23 Trillion Bailout Estimate
Yesterday, TARP Inspector General Neil Barosky released a report which crudely tallied up the cost of every economic rescue program proposed during the current crisis — including those that have been discontinued or never even began — to state that the total scope of all financial rescue programs comes to about $23.7 trillion. Cable news hosts ran wild with the report, using it to claim that taxpayers will “ultimately” wind up paying $23 trillion in “bailouts.”
The number continued to be cited on cable last night and this morning, with Fox News even claiming that $23 trillion will be the final cost of TARP alone. But Barofsky himself appeared on CNN to explain that the actual outstanding amount for the financial rescues is closer to $3 trillion, including loans that have yet to be repaid. Watch a compilation:
Barofsky’s report clearly states that “these numbers may have some overlap, and have not been evaluated to provide an estimate of likely net costs to the taxpayer”:
[S]ome of the programs have been discontinued or even, in some cases, not utilized. As such, these total potential support figures do not represent a current total, but the sum total of all support programs announced since the onset of the financial crisis in 2007.
But this doesn’t go far enough in explaining how unlikely we are to ever come close to spending so much money. As Floyd Norris explained in the New York Times, Barofsky’s estimate “assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless.” If this doomsday economic scenario were ever to occur, the American currency would be rendered worthless.
Media Matters pointed out that both USA Today and the CBS Evening News used the same misleading number. And as Norris put it, publishing such a meaningless number makes Barofsky seem like nothing more than “an irresponsible headline hunter.”
Cross-posted on ThinkProgress.
4 Responses to “TARP Inspector General Debunks His Own False $23 Trillion Bailout Estimate”
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Of course, the only thing that will hit the airways, especially those on FOX will be anything that attacks the current administration.
For them, this is like reality TV…absolutely nothing has to be real! Pretty pathetic.
July 22nd, 2009 at 1:54 pmWhy does this guy still have the job?
July 23rd, 2009 at 1:26 pmGood question! Another might be, Who is he working for? Talk about a waste of taxpayer money! He could undoubtedly go to Fox or any of the other media “news” outlets after displaying the kind of idiotic bullshit so similar to their own garbage. No wonder so many Americans are walking around in a daze. People have to realize all they are getting from the media is bull and turn their TV off.
July 23rd, 2009 at 11:39 pmTHIS IS THE LEAST IMPORTANT PART of the TARP-IG report. THe point is, the only people who DO know how much money is being flushed down the Wall Street toilet, AREN’T TALKING ABOUT IT.
That’s the important part of Barofsky’s report. There is no transparency, no accountability, in the expenditure of what unarguably IS trillions of taxpayer dollars. We shouldn’t get sidetracked.
Barofsky is standing up for all the US taxpayers, demanding that the people accepting our largesse account for how they spend our money. He’s about the ONLY person in DC doing so. Calls for his firing are just plain CHILDISH.
Get a bloody grip people.
July 27th, 2009 at 8:50 am