http://www.google.com/hostednews/afp/article/ALeqM5iuL1HParBuO4WyHJIxw6rlOKdz-AUS could spend 23.7 trillion dlrs on crisis: report
(AFP) – 3 days ago
WASHINGTON — The United States has pledged up to 23.7 trillion dollars to confront the worst recession in decades and shore up the weakened financial system, a government investigator said Monday.
Neil Barofsky, the special inspector general of the Troubled Asset Relief Program (TARP), said that enormous government support has ballooned in the nine months since the creation of the TARP, initially valued at 700 billion dollars.
"As massive and as important as TARP is on its own, it is just one part of a much broader federal government effort to stabilize and support the financial system," Barofsky said in prepared testimony for a hearing Tuesday of a House of Representatives committee.
"From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase 'toxic' assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity," he said.
"The total potential federal government support could reach up to 23.7 trillion dollars," Barofsky said in remarks submitted to the House Committee on Oversight and Government Reform.
Barofsky said that any assessment of the effectiveness or the cost of TARP "should be made in the context of these broader efforts."
The special investigator's testimony was released amid growing criticism of President Barack Obama's handling of the economy, which entered recession in December 2007.
Some critics have said the 787-billion-dollar stimulus passed in February has been ineffective in dealing with the worst downturn since the Great Depression. The Obama administration has brushed aside calls for a second stimulus, saying the first stimulus is a two-year plan that will take time to work.
