New report blasts Treasury's implementation of TARP

Posted Jan 9th 2009 10:30AM by Lita Epstein
Filed under: Money and Finance Today, Personal Finance, Politics, Housing, Financial Crisis

A bipartisan Congressional panel headed by Harvard Law School professor Elizabeth Warren released a report today blasting the U.S. Treasury department for its failures related to the $700 billion Troubled Asset Relief Program (TARP). The report indicates that:

* The Treasury Department has no way to ensure that banks actually lend the money they have received from the government. In fact press reports indicate that banks appear to be hoarding the cash with the excuse that there are no worthy candidates out there.

* The Treasury Department has not yet developed standards for measuring the success of the program. Treasury has given out all but about $75 billion of the first $350 billion. It's outrageous that the Treasury Department didn't develop some way of measuring success before dolling out almost $300 billion of taxpayers' money.

* The Treasury Department has ignored requests for more information or has given incomplete answers to questions raised by the five-member Congressional panel.

With these findings, can anyone wonder why Congress is refusing to authorize the second half of the $350 billion TARP funds? Congress would fail in its oversight responsibilities if it released any more taxpayer money to this incompetent group in the Treasury Department. Treasury promises it is working on a plan to better track how the banks are using the billions of dollars they've already gotten.

TARP was supposed to help borrowers refinance or deal with mortgages worth more than the market value of the homes. Congress is developing new provisions for responding to this need before it will release any more funds to the Treasury department.

While I believe the sooner these funds get out the better to stem some of the bleeding in the foreclosure crisis, giving funds to a Treasury Department that obviously doesn't care about what happens on Main Street is worse than doing nothing right now.

Lita Epstein has written more than 25 books including "Reading Financial Reports for Dummies" and the "Complete Idiot's Guide to Value Investing."

Tags: inthenews, TARP, treasury

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Reader Comments (Page 1 of 1)

1-09-2009 @ 1:08PM

David said...

Face it folks, Hank Paulson doesn't give a rat's behind about anyone but himself and the success of Goldman Sachs. Any other comments on the subject of TARP, bailout funds etc is a waste of breath.