US Special Inspector General Neil
Barofsky, who job it is to oversee the Troubled Asset Relief Program ("TARP"),
has opined in his new quarterly report to Congress and testified before the
House Oversight and Government Reform Committee that the real, total cost of
all the BailOuts since last Fall could well exceed $24 Trillion, spread across
some 50 different efforts at relief – that’s Trillion, with a "T." Now go clean up the coffee that you
just spilled all over your computer; I’ll wait.
OK, I exaggerated: the actual
number that all the BailOuts, bank rescues and other economic lifelines could
end up costing the federal government is only as much as $23.7 Trillion. That’s $80,000 for each and every American citizen – you, me,
and that toddler riding his tricycle in your neighbor’s yard right now.
What is an Inspector General
anyway, and why is he giving us this impossible pill to swallow? One of our early astronauts, John
Glenn, was, as a senator, instrumental in getting the federal statute passed
authorizing 12 OIG’s – that’s federal-government-ese for Office of the
Inspector General. Today, there
are some 69 different and autonomous OIG’s working in the alphabet-soup world
of federal bureaucracy. OIG’s are
delegated the authority and task of investigating government agencies, military
organizations, military contractors and others to see if they are operating as
whoever created them intended and to audit their expenditures, looking for
misconduct, waste, fraud and other inefficiencies, and even crimes. OIG’s exist at the federal, state and
local levels, but the federal ones employ forensic auditors, called
"Audigators," by some.
The federal OIG’s operate together under the auspices of agencies like
the President’s Council on Integrity and Efficiency ("PCIE") and the Executive
Council on Integrity and Efficiency ("ECIE").
You can view OIG’s working together
at the federal level on their website: www.ignet.gov
. These OIG’s render reports
quarterly or Semi-annually to Congress ("SARC") – it is in one of these reports
which has just come from the OIG who oversees TARP and the BailOuts which
contains the startling figure of $24 Trillion Dollars for the total cost to the
federal government (read: you and me) for the BailOuts that we have been
puzzling over since they began early last Fall.
Last October, the Bush Administration
told us the BailOuts would cost some $700 Billion and we all collectively
gasped. When the Obama
Administration took office in January of this year we heard of a $787 Billion
Dollar Stimulus Package. Now, OIG
Neil Barofsky has not only let the other shoe fall, he has deluged us with a
whole shoe factory, telling us in his latest report to Congress that the TARP
could wind up costing us $24 Trillion, a number which is as incomprehensible as
the size of the known universe or the number of grains of sand on every beach
on earth, or the total number of stars in the sky, and then some.
To get some perspective, the entire
American economy is but $11 Trillion Dollars – so, the BailOuts could wind up
costing twice the worth of our entire economy! Put other ways, $24 Trillion Dollars is more than the cost
of every single war that the United States has ever fought, all added together
– it is the most that the federal government has spent on any single effort in
American history; more than the federal highway system that Eisenhower built in
the 1950’s – more than all the TVA’s, Hoover dams, and everything else you can
tally up.
Barofsky, a former lawyer and
prosecutor, does not have the authority to actually get these numbers from
looking at the books of lenders – he urges more transparency, which is the
financial equivalent of truly locking the barn door after the horse (or herd)
has escaped; Barofsky gets them by adding up all kinds of investigatory
materials and figures instead. Has
the BailOut money gone to strengthening the financial statements of major banks
and financial institutions who are insolvent – the ones reporting gigantic
profits and preparing us for equally giant bonuses come year-end, perhaps?
Barofsky’s report, in a revelation
that will shock nobody, is particularly critical of the US Treasury for
allowing extraordinary conflicts of interest to exist in the companies that the
feds have hired to manage TARP programs.
Barofsky wants Treasury to report the actual worth of assets it has
purchased pursuant to the BailOut.
When Treasury criticized his report as exaggerated, Barofsky is quoted
by CNN as saying: "If it’s a meaningless exercise, then why are you doing it
for Citigroup, Bank of America and AIG?"
Did our federal government really
hand out that kind of stupendous amount of money without any meaningful
accountability? It sure seems that
way.