Taxpayers Are Being Held At Bay By The U.S. Government And Private Investors

As US Banks continue to get more Stimulus money from the U.S. Government, it seems the less they are willing to lend even to qualified borrowers. To this date the banks have consumed about 590 billion dollars of the original 700 billion dollars that were slated for the bailout. Of the 110 billion or so that remains the treasury expects that it could possibly grow by another 25 billion as the banks begin to repay their loans. Undoubtedly this would help as more money will be need by some banks that still have a lot of bad assets on their books. But can you believe the word from the U.S. Treasury is that they will most likely not accept the repayment of these loans because they say it would slow down the recovery period here in the USA. Once again the taxpayers are on the hook. It was my understanding that once the loans were made, the object was to repay them in a timely fashion. Not only that, but the billions of dollars that these banks received were supposed to help stimulate the economy by giving consumer loans. But of coarse these loans never materialized for the average consumer who in this case also happens to be the taxpayer or primary source of the money that comes from the U.S. Government.
The Bad Assets that are being held by these banks are going to be a major catastrophe for the American taxpayer. The U.S. Treasury says it will match dollar for dollar with private investors when the Bad Assets are purchased. And that the market will be set by the public-private sector in which most case will create a conflict of interest. It will also increase the chances for fraud and money laundering through private equity firms, and this could only be the beginning. In the end the taxpayer's risk is many times higher than that of the private parties involved. The Federal Reserves estimate is around another 2 trillion dollars of which half the American taxpayer is on the hook for. And if history has taught us anything it is that the U.S. Government estimates are always on the short side of the balance sheet. Which means that the likelihood of this Bad Asset program costing the American taxpayer 1 trillion dollars is more likely to cost 2 trillion dollars and the overall cost being between 3.5 and 4 trillion.
With these types of figures it is inevitable that some type of criminal activity is going to be involved. Therefore it now become the duty of the U.S. Government to put rules and regulations in place that would protect the American taxpayer from looters and profiteers that seek to exploit the weaknesses in the system. I know it won't stop it all but every little bit helps. After all, we are all in this together whether we like it or not. In closing, everybody needs to do their due diligence. If you see or suspect something a miss just report it, after all it's your money to.
Comments And Frustrations Welcomed!