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The government's bailout watchdog just issued a 247-page report concluding what those of us with a brain already know: The Treasury's plans are vulnerable to fraud and abuse.
But the one thing that wasn't in the report is that all of this abuse and corruption is fueling the one deficit that no spending cut or tax hike will be able to close: a deficit of trust. Or, as President Obama called it Monday, a "confidence gap."
What kind of confidence gap is there when you change your position on torture?
Before I get to the abuse, let me show you the abuse of being treated like a 3-year-old.
A great example is President Obama's mandate to slice a laughable $100 million out of the record $3.6 trillion budget and then send his spokesman out there Monday with a ridiculous defense of it:
(BEGIN VIDEO CLIP)
WHITE HOUSE PRESS SECRETARY ROBERT GIBBS: I am being completely sincere here, that only in Washington, D.C. is $100 million not a lot of money. It is where I'm from. It is where I grew up. And I think it is for hundreds of millions of Americans.
UNIDENTIFIED FEMALE: But the point is it's not a very big portion of the deficit...
UNIDENTIFIED MALE: You were talking about an appropriations bill a few weeks ago — that at $8 billion — being minuscule; a billion in earmarks. We were talking about that and you said that that —
GIBBS: Well, in terms of —
UNIDENTIFIED MALE: A hundred million is a lot, but $8 billion is small?
GIBBS: What I'm saying is I think it all adds up...
(END VIDEO CLIP)
Let me get this straight: $100 million is a lot to cut, but $8 billion is a small amount to spend? Please. We're not 3-year-olds you can talk down to.
The trust deficit is widening because of two things: double-talk and corruption.
Even as they "slash" 1/35,000th from the budget, the double-talk is that they're only cutting it from one area to fund other areas. In other words, it's not a cut at all.
And then you have the corruption. We are finding out from the oversight panel's report that last fall's $700 billion TARP package has grown to a dozen programs that could reach a price tag of $3 trillion when you add up the Federal Reserve loans, FDIC guarantees and private money.
The report reads: "The sheer size of the program... is so large and the leverage being provided in the private equity participants so beneficial that the taxpayer risk is many times that of the private parties, thereby potentially skewing the economic incentives."
Who'd have seen that coming?
There have been 20 investigations into possible securities fraud, tax law violations, insider trading and mortgage fraud have already been opened and that's just the first wave. Why so many? Maybe because just 10 people have been overseeing 500 financial firms.
The non-partisan Congressional Budget Office now puts the taxpayer loss so far at $356 billion, which might be more palatable if the stupid program was actually working. From January to February, 12 of the 21 TARP recipients reported a *drop* in lending.
But corruption is confined to TARP. The Washington Times reports that Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that just gave her husband's real estate firm a big contract.
Meanwhile, Congressman John Murtha managed to get $31 million in pork for 10 different companies or individuals who gave to his campaign.
And don't forget about the Charlie Rangel investigation that is now three months past due or the Chris Dodd/Countrywide scandal.
Let me bring this close to home: Your wife doesn't trust you because you're a spendaholic, so you tell her you didn't have a latte today. She says that's a good start; so you'll be cutting out the latte every day? Oh no, just today; I'll be having a latte every day after that.
Do you think that will close the confidence gap?
What will close it is living up to the very promises President Obama made to us during his campaign: transparency, accountability and honesty.
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