Tarp Overseer Debunks Bailout Myths: Big Companies HAVEN’T Repaid Tarp Funds … And Funds to Help Homeowners HAVEN’T Been Disbursed

Debunking Bailout Myths

Apologists for government bailouts push two main myths:

  • That all of the bailout funds have been repaid
  • That the bailouts helped the average American

But the official government overseer of the Tarp bailout program – the special inspector general for TARP, Christy L. Romero – has debunked both myths.

Today, Romero wrote the following to Congress:

After 3½ years, the Troubled Asset Relief Program (“TARP”) continues to be an active and significant part of the Government’s response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).

And earlier this month, Romero stated that the portion of the Tarp funds which were supposed to help homeowners haven’t been disbursed:

A fund to support homeowners in the communities hit hardest by the collapse of the housing bubble has disbursed just 3 percent of its budget and aided only 30,640 homeowners in the two years since its creation, according to a report released on Thursday by a federal watchdog office.

The Hardest Hit Fund, which was created in the spring of 2010, grants money to state housing finance agencies for efforts to help families that are facing foreclosure. It has “experienced significant delay” because of “a lack of comprehensive planning” by the Treasury Department and limited participation by Fannie Mae, Freddie Mac and the large mortgage servicers, said the report by the special inspector general for the Troubled Asset Relief Program.

“Look at the TARP money that goes out to the banks,” said Special Inspector General Christy Romero in an interview with The Huffington Post. “That goes out in a matter of days. This has been two years and only 3 percent of these funds have trickled out to homeowners.”

Indeed, bailing out the big banks hurts – rather than helps – the American economy. See this, this and this. (And it doesn’t take a PhD economist to guess that using bailout funds to buy gold toilet seats and prostitutes is probably not the best way to stimulate the economy as a whole).

The only way to really stimulate the economy would be for the government to give money to the little guy on Main Street – instead of the big boys on Wall Street. And see this.

Yet the big banks continue today to be bailed out through a wide variety of overt and hidden schemes … while the little guy gets nothing.

This is true even though the American people were opposed to the bank bailouts from day one, and continue to oppose them:

As I’ve noted since 2008, Americans are united in their overwhelming disapproval for bailouts to the big banks.

This has remained true right up to today.

As Rassmussen found only last month (as summarized by KXLF news):

Today’s Rasmussen Reports survey finds that most Americans don’t like bailouts for financial institutions.

60% Oppose Financial Bailouts; 74% Say Wall Street Benefited Most

Survey of 1,000 American Adults

***

• Just 20% think it was a good idea for the government to provide bailout funding to banks and other financial institutions, but 60% say otherwise.

• While many activists try to link the Republican Party and Wall Street, Republicans think the bailouts were a bad idea by an eight-to-one margin.

• Those not affiliated with either major party think they were a bad idea by a four-to-one margin. Democrats are much more evenly divided. Thirty-four percent (34%) of those in the president’s party say the bailouts were a good idea while 42% disagree.

• Overall, 68% believe that most of the bailout money went to the very people who created the nation’s ongoing economic crisis, but 12% disagree and 21% aren’t sure.

[And see this]

As the Washington Post’s Greg Sargent notes, the recent proposal from lobbyists to the American Bankers Association recommending ways to co-opt the Occupy movement accurately stated:

Well-known Wall Street companies stand at the nexus of where OWS protestors and the Tea Party overlap on angered populism. Both the radical left and the radical right are channeling broader frustration about the state of the economy and share a mutual anger over TARP and other perceived bailouts. This combination has the potential to be explosive later in the year when media reports cover the next round of bonuses and contrast it with stories of millions of Americans making do with less this holiday season.

(Except that it is the majority of Americans – not “extremists” on either side of the aisle – that share this anger).

The “Tea Party” movement was centered on the protesting government bailouts of the giant banks, before it was hijacked by the mainstream Republican party, Sarah Palin, Neocons and others. See this, this, this, this and this.

Ron Paul said last month at a GOP debate:

Bailouts came from both parties…. If you have to give money out, you should give it to people losing their mortgages, not to the banks.

And one of the most common sayings of Occupy Wall Street protesters is:

Banks got bailed out. We got sold out

(See this and this.)

Note: Even the bailout money which was repaid was largely just refinanced using money from other government bailout programs.

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  • http://www.youtube.com/watch?v=Lyl_ztqOgDs Tobias

    On 05/25/2012, Ron Paul Supporters across America should gather together to discuss the idea of Dr. Paul running on an independent platform and brainstorm a clever strategy on how to launch a parallel campaign in the event he is denied the opportunity of becoming the Republican presidential candidate. The end goal is witnessing Congressman Ron Paul announcing his presidential bid as an independent the same day America celebrates Constitution day: September 17th, 2012.

    http://www.youtube.com/watch?v=Lyl_ztqOgDs

    A very interesting video clip indeed.

  • http://www.correntewire.com lambert strether

    And $118 billion is a pretty small portion of the bailout total, too.

  • Dave Mowers

    118 billion is pepper corns compared to the 16 trillion in direct financial assistance via zero-interest loans from the federal reserve which when loan guarantees are added in is really 37 trillion dollars that has been doled out to the rich on the backs on poor and middle class taxpayers. It is high time to organize violent actions against people with assets over ten million or incomes of one million or more per year. The Federal Reserve is the people’s bank not a private credit and loan agency for the wealthy. That money should have gone to everyone BUT the rich in America.

    • notas dumbasyou

      to dave mowers….
      hello?

      anybody home?

      time to do some reading dude.

      first. very bad idea to call for organizing violent actions against anybody. it’s called incitement and it can get your butt put put in jail pretty darn quick.

      second and most important. “The Federal Reserve is the people’s bank not a private credit and loan agency”…. you could not be more wrong. the federal reserve is not federal in any way. any more than federal express. do the reading. look up “lewis vs. the united states”.

      while you’re at it. look up fractional reserve banking.

  • http://www.examiner.com/nonpartisan-in-national/carl-herman Carl Herman

    GREAT article GW; thank you. This points to criminal fraud, of course, in the hundreds of billions of the 99%’s dollars (as an initial way of saying the amount) that includes “leadership” in banking, government, and corporate media.

    I, for one, reject being a slave to these lies and crimes.

    I, for one, respectfully request those with arrest authority to perform their profession with obvious criminal suspects.

    I, for one, want the facts rather than the lying sacks of spin the 1% gives us.

    Aren’t y’all ready for the truth of what’s happening on our beautiful and dominated planet?

  • A. Magnus

    “It is high time to organize violent actions against people with assets over ten million or incomes of one million or more per year.”

    Careful what you wish for, sparky. Killing off the entertainment class and sports class will REALLY piss off the proles…

    “The Federal Reserve is the people’s bank not a private credit and loan agency for the wealthy.”

    Says who? Definitely NOT the legislation that created it…

  • windcatcher

    Short billions in TARP funds- disbursements not paid?

    Gee, that reminds me of another missing funds story: How about the 2.6 TRILLION dollar CASH fund to rebuild Iraq that just went missing?

    What is the difference between missing trillions and billions of dollars and stealing trillions and billions of dollars?

  • Bob Fox

    If so much of the TARP money has been paid back, where did it go?

    Why hasn’t the national debt gone back down by the amount of the repayments?

  • John

    Tarp is nothing but a scam to rob the people of the united states. Both republicans and democrats are guilty of this crime!

 

 

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