"It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt." -- JP Curran, 1790

Monday, December 22, 2008

TARP: A Gigantic Bridge to Nowhere?

The "Bridge to Nowhere" approved federal project to spend an estimate $398 million on a bridge to connect Alaska's Gravina Island residents (approx. 50) to Ketchikan International Aiport was once upon a time the scandal of scandals in mis-appropriated federal funds.

My, how the times have changed...

The U.S. Treasury has shown an ineptitude only capable by a government organization in its issuance, administration, and reporting of the $700 BILLION bailout. Otherwise known as TARP (Troubled Asset Relief Program), the bailout was approved with roaring voices of oversight and accountability by Democrats and Republicans in Congress.

The sad, almost predictable, fact is that with almost half of the money issued ($350B) there is little known impact. The AP surveyed those who received large chunks of the issued $350B, and they basically got non-disclosure regurgitation and vague accounts.

I may be old fashioned but how did these firms justify the dollar amounts they received? To justify were there ROI discussions or deliverable terms and conditions or did they throw out a round number and Paulson's cronies wrote the check? It is amazing the unwillingness and probable inability to produce some semblance of order to how the money is being issued and spent.

On issuance:
  • What justification is used by firms to gain access to the funds?
  • Are there strategy investments the Treasury is targeting?
  • What are the terms for repayment?
  • Are there goals of any kind related to spending?

On spending:

  • Are the recipients accountable in any way to the Treasury to show spending?
  • Are the rewarded for extending credit?
  • Do they have any incentives to invest in specific sectors (i.e. foreclosure avoidance)?

OK, I'm getting dizzy staring into the great abyss. Maybe, just maybe, someday we will know how and if the money has been spent. Don't hold your breath!!

Signing off...JCB

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