Just when we were starting to believe that the US government's huge TARP "bailout" of several Wall Street giants was working comes a disconcerting new report. According to the Treasury Department's own "watchdog" -- inspector Neil Barofsky -- the government's actions during the financial meltdown significantly increased the risks of an even worse economic crisis in the future. He also says that the problems that created the crisis in the first place have not been fixed, and in some cases have even gotten worse. He also questions the programs overall effectiveness, saying that it has not led to increased bank lending or a decrease in home foreclosures, two of its major goalsAccording to Barofsky:
"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car..."
Since the $700 billion bailout was launched, the large national banks and other "too big to fail" organizations have gotten bigger, continue to overpay their executives, and continue taking on too much risk because they believe the government will save them again if things go bad. According to Barofsky his group of investigators is also looking into nearly 80 cases of possible criminal fraud involving things like tax evasion, mortgage lending, payment collection, insider trading, and public corruption.
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