People have begun to wonder whether an upper limit exists for the amount of money Barack Obama will spend to overhaul American economics. Not withstanding popular belief, Treasury’s Special IG Neil Barofsky says that Obama does have a limit at the moment. Take a deep breath, folks, and try not to squeal with, er, glee:
“The total potential federal government support could reach up to $23.7 trillion,” says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government’s efforts to fix the financial system.
Yes, $23.7 trillion.
“The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just $1 trillion — $23.7 trillion is a staggering figure.”
Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could.
At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis. Barofsky’s estimate means that if each federal agency spends the maximum potential amount involved in these 50 different initiatives — if the Federal Reserve ends up spending $6.8 trillion on its programs. If the Treasury Department spends $4.4 trillion, if the Federal Deposit Insurance Corporation spends $2.3 trillion, and so on — then the numbers add up to a total of $23.7 trillion.
Yeah, don’t worry — government never spends as much money as it allows itself. Why, that would be like deficit spending, and the Obama administration would never put up with that!
Uh … sure.
The reason Barofsky mentions this is to get Congress to help impose more stringent oversight on Treasury spending. The statement comes from his report, discussed earlier today, that showed that the hundreds of billions given to financial institutions from the TARP program didn’t get used properly and that no one can tell where all of the money went. If we allow that to happen with $700 billion, Barofsky argues, how can we spend $23.7 trillion with any hope of accountability or purpose?
I have a better idea. Let’s stop spending that money and cut our losses now.