Watchdog: Bailout Has Helped Wall St., But Infuriated Main St.

WASHINGTON, Oct. 21, 2009— -- More than a year after its implementation, the $700 billion bailout program has proven to be a mixed bag of successes and failures, helping Wall Street but infuriating Main Street, a government watchdog says in a new report.

In his new quarterly report to Congress released today, watchdog Neil Barofsky says the controversial bailout has helped lead to "significant signs of improvement in the stability of the financial system," but it has not yet stopped rising unemployment and home foreclosures.

"The dramatic steps taken by Treasury and other agencies through TARP and related programs played a significant role in bringing the system back from the brink of collapse," says Barofsky, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

"On the other hand, the risk of foreclosure continues to affect too many Americans, unemployment continues its rise, and the stresses on the commercial real estate market threaten to increase the pressure on banks and small businesses alike yet again," he says.

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Moreover, Barofsky adds, the bailout has also put hundreds of billions of taxpayer dollars at risk, created serious moral hazards, and fueled public anger about the government's lack of transparency.

Barofsky, as he has in the past, reiterates that although the government has raked in a 17 percent profit on repaid TARP funds up to this point, "it is extremely unlikely that the taxpayers will see a full return on their TARP investments," since the recovery of funds given to AIG, General Motors, Chrysler, and the housing help program is "far from certain."