Six Ways the Financial Bailout Scams Taxpayers
The biggest loser of the financial bailout is indisputably the American taxpayer.
The Greatest Swindle Ever Sold
How the Financial Bailout Scams Taxpayers, Subsidizes Wall Street, and Props Up Our Broken Financial System
By Andy Kroll
On October 3rd, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the U.S. government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of $700 billion to stabilize the nation’s failing financial systems and restore the flow of credit in the economy.
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Given the lack of transparency and accountability, don’t expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony, and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government’s $1.1-trillion, publicly-funded bailout.
1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer’s expense.
2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference.
3. The bailout’s newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.
4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers’ investments.
5. The bailout’s focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.
6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.
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