Oversight of bailout bill already a failure
Filed under: Ripoffs and Scams, Recession
The Government Accountability Office (the people who audit the federal government) is already saying that the oversight of the $700 billion bailout is failing. And we're only a couple of months into the massive money grab. In particular, the GAO is saying that the Treasury Department has no idea what it's doing or how to make this bailout successful. (Hint: It's not going to be successful.)The major criticisms of how the Treasury is handling the bailout include:
- Not having a system in place for verifying that banks receiving federal money are following the rules on executive compensation and dividends.
- Not having even basic internal controls in place.
- Inadequate staffing of the Office of Financial Stability, which was created to implement the bailout.
- No decision by the Treasury on whether firms getting federal funds will have to provide reports on their use of the funds.
This bailout might become the biggest financial failure of our government. It's already been reported that the taxpayers are on the hook for far more than the $700 billion. Try about $2.5 trillion and counting. And the Treasury... the people who are supposed to be looking out for the taxpayers... are asleep at the wheel and not even doing basic monitoring of the bailout. That doesn't make me feel very good.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
Reader Comments (Page 1 of 1)
12-02-2008 @ 7:41PM
Lou said...
I think that they should have given that 700 million dollar bail out to the poor tax payers. At least that way I know where that money went and I think that the number would have been approxaimatly 24000.00 dollars per tax paying citizens. Lately it seems that the government has screwed up everything that they have tried to help with. And know they are giveing the car companies a hard time for some of that bail out money? They should have given the banks a harder time as well. I would have proscecuted anyone recieveing a bonus from the bail out funds. Just my 2 cents I also think that there should have been a mass voting for it for example let the people vote for it. Not the politicians as you see we still got screwed.
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12-02-2008 @ 7:57PM
Barb said...
I agree, that 700 billion should have gone to the people. Only then would it have truly helped the economy as well as getting individuals out of debt. I believe it should have been divided equally.
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12-02-2008 @ 11:23PM
Larry said...
Had they sent it to the taxpayer, at least we would know where it was ! ! And we would know how to spend it.
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12-03-2008 @ 1:41AM
LT said...
I'm still trying to figure out the logic of the first three comments...Take money from the taxpayers to give to the taxpayers to be repaid by the taxpayers? Wouldn't the taxpayers come out better if the bailout had been voted down and let the market fix this problem itself? In a mess like this, someone will get hurt...that's just how it is...but, even if the government sent that money to the taxpayers, eventually (with billions or trillions of dollars at stake) the only thing that would be divided equally would be misery....the misery that would come with having to pay the tab.
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12-03-2008 @ 4:24AM
Dick said...
I still don't understand the logic behind bailing out the mortgage companies. Example: Here in So. Florida a home that sold a year ago at 1.4 million is now (after forclosure) listed by the bank at $600,000. Another, a condo, purchased for $770,000 last year is listed at $189,000 but the real estate people say it will probably only get $110,000 at sale. The home I pointed out is listed for sale at an $800,000 loss to the bank. The condo will be sold off at a loss of nearly $600,000. Wouldn't it have been better to refinance the homes at prime plus 1% for five more years and take a smaller profit than forclose and lose hundreds of thousands? The only good news to come out of this is that the price for a home is back to where it should be. However, the fat cats are already starting to buy up the forclosed properties and as soon as banks start lending again the profitiers will start flipping those homes and inflating the values all over again. Maybe loans shouldn't be linked to your credit rating only. Need a loan to buy a house to live in? Let it come with a mandatory fixed rate. Want a loan to buy a house to re-sell? Leti it come at a rate that's triple plus 10% of the profit. Don't like that deal? Use your own money! Maybe if you have to risk your own cash you'll think twice.
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12-04-2008 @ 9:28AM
Kelly said...
I never understood how people were affording all these houses to begin with. 20 years ago when we built our house the rough rule of thumb was..20% down and your monthly payment would be approx. 1% of the amount you borrowed. When I would see all these young people with children and average jobs moving into 400k houses I could never understand how they were affording a 4 k a month house payment ! I kept thinking..they cant ALL have rich parents who gave them money. There was just too many of them. I dont understand why AIG and the others were not forced into presenting with a "business plan" like they want auto makers to do. Obama has talked about creating jobs...if the auto companies fail there are going to be millions more out of work. Too many other businesses are dependent on the car makers. Also lets not forget..the Big 3 want a loan..not a handout. I think having a decent job is way more important than getting a one time handout from the govt that your going to end up paying back in spades anyway.
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