Update: The actual testimony is here, SIGTARP Barofsky Testimony and attached to this post.
As massive and as important as TARP is on its own, it is just one part of a much broader Federal Government effort to stabilize and support the financial system. Since the onset of the financial crisis in 2007, the Federal Government, through many agencies, has implemented dozens of programs that are broadly designed to support the economy and financial system. The total potential Federal Government support could reach up to $23.7 trillion.
In the nine months since the Emergency Economic Stabilization Act of 2008 (“EESA”) authorized creation of the Troubled Asset Relief Program (“TARP”), the U.S. Department of the Treasury (“Treasury”) has created 12 separate programs involving Government and private funds of up to almost $3 trillion. From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase “toxic” assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity.
Yes, are you standing in horror? $23.7 trillion dollars. Supposedly this is what is in SIGTARP, the inspector general of TARP funds is going to say. @&*)$@ that will break the United States. I don't know how else to put it.
I will assume this is total exposure, commitments and not actual real costs (that's like saying a never ending black hole bucket to have $23.7 trillion dollars).
Mr. Barofsky also estimated the government's potential exposure to programs aimed at fixing the financial crisis at $23.7 trillion. To get to that figure, Mr. Barofsky combined direct spending with all the government guarantees and programs and assumed the "gross exposure" the government could face if all the programs were tapped to their fullest potential. "These numbers may have some overlap, and have not been evaluated to provide an estimate of likely net costs to the taxpayer," his report noted.
U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.
The actual report, to be presented to the House Committee on Oversight and Government Reform, was covered (and the original report is attached) in SIGTARP July 20th Report - What are Financial Institutions Doing with the Dough? in which we noted the U.S. Treasury is stone walling on any audit or oversight of TARP and other funds.
The Wall Street Journal made the testimony document public. It appears the actual Congressional hearing is tomorrow. With news like this, leaked, pre-released, we will be covering the hearing for assuredly sparks are gonna fly. Wow!