Wednesday, September 23, 2009

Some U.S. bailout funds won't be recovered: watchdog

Who didn't see this coming a mile away? This wasn't a bailout; they didn't borrow it, they stole it.

    Reuters -

    U.S. taxpayers will probably never recover all of the hundreds of billions of dollars invested to bail out financial firms, automakers and homeowners, a key watchdog for the program said on Thursday.

    Neil Barofsky, the special inspector general for the U.S. Treasury's $700 billion Troubled Asset Relief Program (TARP), said in prepared U.S. Senate testimony that the bailout fund played a significant role in stabilizing the financial system, but it may never fulfill certain policy goals.

    "The progress on meeting the goal of 'maximizing overall returns to the taxpayer' is unclear," Barofsky said in testimony to be delivered to the Senate Banking Committee.

    "While several TARP recipients have repaid funds for what has widely been reported as a 17 percent profit, it is extremely unlikely that the taxpayer will see a full return on its TARP investment."

    For example, he said $50 billion in funds allocated to modify mortgages to reduce monthly payments will never yield a direct return, while full recovery of the more than $80 billion spent to prop up the U.S. auto industry "is far from certain," Barofsky said.