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October 21, 2009 7:45 AM

TARP Watchdog: Repayment "Unrealistic"

Posted by Daniel Carty
(CBS)
It would be "unrealistic" for Americans to expect the government to recoup all of the $700 billion spent in the last year to prop up a teetering financial system, the bailout's inspector general said Wednesday.

Neil Barofsky, who oversees the federal Troubled Asset Relief Program, said that while TARP funds helped pull the economy back from the brink of collapse, there is "no expectation at all that that money will come back."

Barofsky released a report Wednesday detailing the program's mixed results. During an appearance on CBS' "The Early Show", he graded the bailout effort as "incomplete"

"There's been some successes in as far as pulling us back from the brink of a financial collapse. But as far as restoring lending, helping homeowners, helping small businesses, that hasn't materialized yet. We'll have to wait and see," he told "Early Show" co-anchor Harry Smith.

One aspect of the program that's appeared to raise the ire of the public and Congress is the lavish bonuses paid out by Wall Street firms aided by taxpayer money. Barofsky called the bonuses a "significant issue" but noted "there's nothing in the legislation to stop them from doing so."



Tags:
Neil Barofsky ,
TARP ,
bailout
Topics:
Bailouts
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Add a Comment See all 39 Comments
by cy4466 October 21, 2009 3:20 PM EDT
Our current leaders:

-Print money in the moring

-Stuff suit cases before lunch

-Buy gold in the afternoon

-Fill safe's with gold in the evening
Reply to this comment
by lvdragonlady-2009 October 21, 2009 2:41 PM EDT
BULL!!!
IF the companies that got the money PAID it back BEFORE giving out bonuses that were NOT earned, it would not be a problem at all.
Reply to this comment
by thesevenveils October 21, 2009 3:04 PM EDT
This is complete Bull! The very financial companies that were bailed out by our tax money dolled out more bonuses last year than they did the year before. It was as if they expected then that they'd never have to pay off their loans.

The financial system collapsed under the watch of Ronald Regan and the Public payed dearly. And again under GW Bush. And both times the banking companies got a gift, not a loan.

Now who has who in their front pocket?
by kbibbee October 21, 2009 2:36 PM EDT
"There's been some successes in as far as pulling us back from the brink of a financial collapse."

Barofsky conceeds there is this one, minor little success. It is like he mentions this under his breath. This is one of the major understatements of... forever!!! Financial collapse is not some a barely worth mentioning downside if TARP had not been passed. No one knows how bad the US and world financial crisis could have gotten. The crisis most likely would have gotten much worse than it did. It may have gotten as bad or worse than during the great depression. Our economy was tanking and no one knew for sure where it was going to stop. There was no other rescue plan besides TARP, other than let nature run its course which may have turned us into a third world country by now. Could we afford to take that chance? Should we have left survival to the fittest because 100% of TARP rescue funding might not have been returned?
Reply to this comment
by raydernation October 21, 2009 1:50 PM EDT
This Inspector General should be fired for saying something like that. I believe all that money will and should be recovered. Why not?
Reply to this comment
by jxknowles October 21, 2009 2:24 PM EDT
by raydernation I believe all that money will and should be recovered.

Absolutely. You couldn't be more correct. Banks can give out bonuses after they pay back the TARP loans with 5% interest. Unless the bank collapsed or went bankrupt I expect to see the money returned, no matter how long it takes.

TARP is actually a good program for taxpayers, if the participants honor the agreements they signed. Extend it to small community banks who actually fund the small businesses we depend on for jobs and state/local tax income.
by fedup12 October 21, 2009 1:46 PM EDT
Wait i want a bonus for doing a c#$%%& job.
Reply to this comment
by Constitionalist October 21, 2009 2:08 PM EDT
I just took a massive dump, more productive than most of these guys have done in a decade. I want my bonus now. Tax free, of course.
by docpeter1953 October 21, 2009 1:06 PM EDT
From the above article, "Neil Barofsky, who oversees the federal Troubled Asset Relief Program, said that while TARP funds helped pull the economy back from the brink of collapse, there is "no expectation at all that that money will come back."
_______________________

This is because the $$ was given to elite CEOs who only look out to pocket the "Retention bonuses" for themselves and their friends. Nothing has really changed. Still the same bunch of worthless crooks that helped perpetuate the mess patting themselves on the back for the extra income their company got and they can bonus for it.
Reply to this comment
by TheDragonfighter October 21, 2009 12:58 PM EDT
We can't expect them to repay all that was borrowed or, to restart lending and help out homeowners (a couple of primary goals of TARP) but, they can give rediculous bonuses to the execs. that caused the problem. The oversight inspector general must be a part of the system that caused the problem. Either that or he, like the corporations and their executives have overestimated the stupidity and gullability of the tax paying public whose money financed the bail out. It's time for a new oversight system and inspector general.
Reply to this comment
by Constitionalist October 21, 2009 1:52 PM EDT
I vote Smith and Wesson for new IG!
by ellensmithee October 21, 2009 12:49 PM EDT
These people are evil.
Reply to this comment
by sjc_1 October 21, 2009 1:46 PM EDT
Bush and Paulson made no provisions for the banks to do the right things with the money. They claim to believe that the bsnks will do the right things with the money and need NO oversight, that would be a government "intrusion" into private business. The banks went out and bought other banks at fire sale prices and gave the executives HUGE bonuses. Management has proven over and over again that you can not trust them to do the right things for the country, but the Republicans keep selling that line anyway.
by ibsteve2u October 21, 2009 12:15 PM EDT
"It would be "unrealistic" for Americans to expect the government to recoup all of the $700 billion..."

lollll...i.e., it has already gone to buy Italian yachts, German luxury automobiles, and villas on the French Riviera.

"Stimulus" spending for Europe, courtesy of America's Wall Street and banking barons.
Reply to this comment
by chonder2 October 21, 2009 11:31 AM EDT
G-I-Jesus:" It is worth it if Wall Sreet will accept certain changes to keep the economy from nose diving again".

GI that statement didn't come out the way you meant it,did it?You haven't given up already have you?America is "our country".Blood,sweat and tears built America, NOT FINANCIAL CASINO GAMBLERS and INSURANCE MIDDLE MEN!!

Don't ANYONE out there give up! Keep calling and writing your Senators and House members over and over.
Reply to this comment
by chonder2 October 21, 2009 11:34 AM EDT
swin5-Did all you GW lovers cheer him on when he started the loans?
by G-I_Jesus October 21, 2009 10:50 AM EDT
Money For Nothing (Dire Straits)

The goal is to recoup the money from Wall Street but to get the economy going again. Then will the government get their money back from tax revenues.

As for the off-the-wall bonuses to Wall Street executives, it is worth it if Wall Street will accept in exchange that certain financial laws and regulations be changed to protect the economy from nose-diving again.

Now, if we could only do the same thing to the music industry.
Reply to this comment
by mrs_nuetron October 21, 2009 10:38 AM EDT
What would Jesus do?

Jesus told the rich man to sell all he had and give to the poor.
===============================
Jesus never said that! Jesus was a capitalist!
Reply to this comment
by briannorwood October 21, 2009 10:35 AM EDT
Don't expect the banks to pay back the 700 billion. They are too busy doling it out to the very same jackasses that caused the mess to begin with!

Don't that beat all!
Reply to this comment
by fedup12 October 21, 2009 10:14 AM EDT
"lavish bonuses paid out by Wall Street firms aided by taxpayer money."

-----------

Isnt there any kind of performance clause for these bonuses???? I mean I would imagine that some of these guys were around since before the crash and are still getting these huge bonuses.

Idiots. I wish they would disclose these bonuses and I just wouldnt invest in that company or do business with them.

I mean honestly huge bonuses for guys that run the company into the ground. They should just issue stock for the bonuses that would at least give them an incentive to do a good job! If they do poorly their stock does bad and therefore their bonus isnt that good.

They are true republicans... You can pry their bonuses(guns) out of their cold dead hands.
Reply to this comment
by msimamaji October 21, 2009 10:09 AM EDT
What would Jesus do?

Jesus told the rich man to sell all he had and give to the poor.

We need to make the rich pay for their bailouts by raising their tax rates to 90%. And we need to reinsitute all the regulations on the banking industry that the Reagan Administration eliminated.

The rich paid a 90% tax rate during World War II and during the 50's and the 60's. The common man had better jobs, and the rich still had plenty of money left.

Putting a surtax on the rich is the same as cutting junior's allowance. Since the rich are behaving like irresponsible teenagers, it's time for the public to act like responsible parents.
Reply to this comment
by AOCGUY October 21, 2009 10:47 AM EDT
Now let me get this straight - I run a business that employess 250 people making on the average $45K/year. I have mortgaged my home to start this business. I make $500K per year on my investment and hard work. Now you want me to pay $450K in taxes leaving me only $50K. What is my incentive to continue to run this business? Given your logic I should close my business, fire those $250 people and just get a job paying $50K/year.
by docpeter1953 October 21, 2009 1:19 PM EDT
RE: AOCGUY

Yes, and quit living beyond my means.

Have a nice day!
by Constitionalist October 21, 2009 2:05 PM EDT
Only for companies that have bailout funds still on their balance should this tax apply. To do so for everyone else would be draconian and kill incentive for business owners. Alternately, it would encourage repayment of the debt by these companies so the management personnel can return to personal profitability. Sadly, this whole problem could have been avoided by applying the same principles that broke apart companies like Bell. One large company failing destroys the economy. Many small companies spreads out the risk, such that any could fail without much affect on the economy as a whole. This also creates more jobs, lowers cost to consumers, and promotes betters quality of service/product. It also disrupts the pipeline feeding massive wealth into the pockets of a select few. I know, it stinks of socialism, but it is a small dose with a proven effectiveness to stimulate competition.
by taxpayingvoter October 21, 2009 9:53 AM EDT
Give all of the greedy jerks their bonuses, but require them to read a book on the History of the French Revolution. It is amazing what 300 million poor hungry peasants can do to a rich persons life.
Reply to this comment
by msimamaji October 21, 2009 10:07 AM EDT
What would Jesus do?

Jesus told the rich man to sell all he had and give to the poor.

We need to make the rich pay for their bailouts by raising their tax rates to 90%. And we need to reinsitute all the regulations on the banking industry that the Reagan Administration eliminated.
The rich paid a 90% tax rate during World War II and during the 50's and the 60's. The common man had better jobs, and the rich still had plenty of money left.
Putting a surtax on the rich is the same as cutting junior's allowance. Since the rich are behaving like irresponsible teenagers, it's time for the public to act like stern father figures.
by fedup12 October 21, 2009 11:43 AM EDT
I love Bourgeois on my French Dip sandwich.
by mrs_nuetron October 21, 2009 9:53 AM EDT
This is all because the Obama administration insisted that Holy and Honest Hank Paulson kept records of the money he was paying out. Shame on Obama!
Reply to this comment
by docpeter1953 October 21, 2009 1:16 PM EDT
MRS NEUTERED!

Good to hear from you again, Gee, it seems like such a long time since you posted here. How is every little thing going? I was thinking and praying about you just the other day, thought you might have gotten out of God's graces and fell ill. Glad to see you prayed your way out of it.
by stopoil October 21, 2009 9:32 AM EDT
Other than the bank employees I am sure all Americans are outraged about the bonuses of the banks and other Wall St. firms. The focus of the question is what can American's do to change this fundamental broken structure? The banks feed off American's, move paper around, created the financial collapse of the international system that threw millions out of work, created the worse foreclosure rates to hit the real estate market. Hard working Americans struggle with even finding a job. This should not be allowed to continue. How can American's change this injustice? Tie bonuses to how well they are creating a stronger economy, creating jobs and companies by financing the private sector. They should be penalized not rewarded for what they did. If they don?t like not getting bonuses when the do a bad job let them find a job somewhere else. I am sure there are millions that would line up for their jobs with new rules, and do a better job. Let current bank and Wall Street employees who want to leave work in a factory or McDonalds. A fundamental change is demanded.
Reply to this comment
by stephand October 21, 2009 12:29 PM EDT
The funny part is that we are blaming banks, but the money we will not recoup is from AIG (insurance), GM/Chrysler (auto) and the Mortgage adjustments (The people that bought homes they couldn't afford). Seems like the banks are paying back the money they owe...
by Constitionalist October 21, 2009 8:58 AM EDT
Once again these economic geniuses figure out what the average taxpayers already knew. This is not a loan program. This is a gift program. Merry Christmas to the rich.
Reply to this comment
by SkirtLifter October 21, 2009 8:52 AM EDT
Barofsky was interviewed on CNBC this AM. He said TARP may have put us in a worse position than before because of the increase in "Moral Hazard".

He's right. Bad behavior was rewarded on multiple levels. Financial Institutions were propped up with tax payer dollars and CEO compensation is UP!. People who bought homes they couldn't afford are getting help.

The bottom line is that if you reward bad behavior, you'll get more of it. This is the "moral Hazard", and it ain't goin' away any time soon!
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