Watchdog: Bank Bailouts Created More Risk in System

January 31, 2010

FoxNews has this report of the Inspector General of TARP … the bailouts increased the risks:

The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department.

“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,” Barofsky wrote.

Looks like we haven’t fixed the financial system as Obama states.

So how does this work, exactly, Obama says at the SOTU that the bailouts saved the banking system, the inspector general of TARP says in increased the risk of future failure. And why didn’t we just let the banks who were setup by risky home loans to unqualified pople by the government, just fail?

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