If the TARP money was laid end-to-end...

A Washington Post article written by Lois Romano was run in the October 18th edition of the Seattle Times and addressed a very fundamental question: how well did the political class track and manage the hundreds of billions of dollars that the government paid out to financial institutions under the Troubled Assets Relief Program or TARP. Congress passed the TARP funding bill in an attempt to get the bad, or so called toxic, assets off of the banks' books so that they would have healthy enough balance sheets to begin loaning money again. This would theoretically get the credit markets unfrozen and get the economy moving again.

Ms. Romano's article was mostly an interview of Elizabeth Warren who is the chairperson of the Congressional Oversight Panel which is supposed to evaluate how well the $700 billion in taxpayer money is being used. Highlights from the article include:

• Warren told Michael Moore in his latest film, "Capitalism: A Love Story", that she does not know where the TARP money went since the government attached no strings to it's use.
• There was no paper trail of the money once it left the Treasury Department and the legislation and the Treasury guidelines did not require any accountability of the funds.
• Almost none of the TARP money appears to have been used for its original purpose, to rid the banking system of toxic assets. Those toxic assets are still around and in some respects are getting worse. Thus, hundreds of billions of dollars later the original problem has not been solved but the money is gone.
• According to Ms. Warren, the original discussion around TARP is that some of the banks had become too intertwined with each other and were too big to fail without economic disaster. It is her opinion, "A year later, the big are bigger than they were. They are more intertwined..."
• In summary, Ms. Warren called the TARP program "a moment of panic." As we all should know, decisions done in a panic mode are usually never the optimal decisions and the interview with more Warren proves that the TARP program is no exception.

Besides not fixing anything and possibly making the financial system worse off, how do you quantify a $700 billion disaster? Two ways come to mind:

1. There about 130 million households in the country, so if each household had to fund an equal portion of the TARP money, the per household cost would be about $5,400. This is $5,400 that could have been spent on consumer goods, housing, mortgages, household debt reduction, education, and myriad of other, positive economic ways if the political class had not flushed it down the TARP toilet and got nothing return. Giving every household $5,400 would have gone a long way to fixing the economy.
2. For those of you that like space travel, if you laid 700 billion dollar bills end-to-end, the trail would reach to the moon and back about 139 round trip times. That is how big a screw up the political class made of the TARP program.

Maybe Elizabeth Warren should be running the country because she could not do a much worse job. At least she seems to have some sense of accountability and respect for taxpayer dollars, unlike the political class. Just like yesterday, and as proposed in"Love My Country, Loathe My Government", those who sat on Congressional committees that were responsible for TARP should be removed from those committees for incompetence and should be laid end-to-end until they reach some level of accountability.