These People In Congress Are Driving Me Up A Wall......

What is the actual cost of the government's programs being used to restore the U.S. financial system to health?

The offices of Issa of California reportedly leaked the contents of the upcoming testimony of TARP Inspector General Barofsky, who suggests that the total liability of the government's various and sundry bailout programs, including TARP, has reached a staggering $23.7 trillion! That's almost twice the size of America's GDP.

It's wrong! It's utter rubbish! We know they smoke some good stuff in Cali, but this is ridiculous. Issa has displayed his complete ignorance of economics in front of TV cameras on more than one occasion. And yesterday's gaffe is likely no exception, though this was an off-camera stunt.

The many critics of the emergency programs have no idea what they are talking about. Despite fits and starts, and ad hoc policies that were frightening at the time, the totality of the programs put in place by the Federal Reserve (mostly) and the Treasury (partly) did exactly what they were intended to do: They stopped a financial crisis of historic proportions from becoming an economic crisis that would have made "The Great Depression" look like the "good 'ole days."

That American citizens are not demanding economic literacy over the obvious incompetence of their elected representatives on all matters financial, at a time when it is most needed, is beyond my comprehension.

Barofsky will soon present his "findings" to a House Oversight Committee, chaired by Towns of Brooklyn, and tell the august group that TARP and other crisis-induced government backstops have a price tag of the aforementioned $23.7 trillion. As far as I can tell, Barosfky is making several fundamental mathematical errors and completely misapprehends the functions and costs of the emergency programs put into place to date.

It appears he is at least double-counting some guarantees, liabilities and insurance facilities developed by the Treasury and the Fed. Further, his claims that banks have misused the original TARP money -- the $700 billion doled out to recapitalize the banking system -- by purchasing other banks or using the funds to make money, is flat-out wrong....

He is investigating some 35 instances of fraud and abuse, some of which, however, have nothing to do with the TARP program of his (apparently) paranoia-induced calculations of the programs' size.

Oh good grief if the TARP money should lead to the successful recapitalization of the financial system and the renewed ability to lend....that's just terrible...

It was only four to six months ago that the global financial system was on the brink of real collapse. Seriously. We were within possibly a moment or two of a run on banks, money market mutual funds and brokerage accounts. That's very serious, scary stuff.

The institution of necessary backstops, guarantees of money market funds, commercial paper programs, troubled assets, bank debt and corporate debt, to name but a few, were vital in bringing us back from the brink and to the much safer place where we sit today.

The highest tally I have seen for the dollar value of the "commitments" from the government and from the Fed is about $13 trillion - yes, a huge number; but much less than $24 trillion! Only a fraction of that has actually been spent.

Taxpayers could lose some money from these programs, but my bet is that at the end of the day, taxpayers will make, not lose, money from all this government intervention. Now how many years that will take, I don't know....(and any "profits" of course will just be subsequently wasted....)

Again, why aren't we DEMANDING that our local congressman or congresswoman take a college course in economics and finance?