Scarborough forwards falsehood that TARP has "price tag of around $23 trillion"

››› ››› DIANNA PARKER

Joe Scarborough advanced the falsehood that the total cost of TARP is "now coming in at a price tag of around $23 trillion."

On July 22, MSNBC's Morning Joe co-host Joe Scarborough misrepresented the cost of "bailouts," asserting that he "read yesterday somewhere that the bailouts are now coming in at a price tag of around $23 trillion." In fact, the $23 trillion figure represents the total of all financial support programs announced since 2007, including programs that have been discontinued and those that have not been utilized. Moreover, the original source of the figure, Special Inspector General for the Troubled Asset Relief Plan (SIGTARP) Neil Barofsky, has said the number is "vastly overblown." After Washington Post columnist Steven Pearlstein said the $23 trillion figure is "a meaningless nonsense number," Scarborough mocked that assertion.

Scarborough joins several other media figures who have cited Barofsky's report in order to claim that the cost of TARP could be $23 trillion or more.

During the Morning Joe segment, after Scarborough cited the $23 trillion figure, Pearlstein explained that the number was an exaggeration:

PEARLSTEIN: Joe, that $23 trillion is a meaningless nonsense number, OK? It assumes that everything that was paid out will never be repaid. Everything that was lent will never be repaid. It's not going to happen, Joe. So don't -- let's not use numbers like that. This is what gets people cynical, OK? So far, all the bank money actually has been paid back by the banks. There's still much to go. But some of the big ones have been paid.

Scarborough responded, "So, Steven, there's nothing to worry about then. You're make -- you know what I'm going to do? I'm going to go to the beach for the next week and not worry about anything. Don't worry, be happy, right?" Pearlstein replied, "Look, if that -- if that was your big worry, Joe, you should go to the beach."

Scarborough subsequently told Pearlstein that "[y]ou sit there and smirk about the 23 trillion number. Give me a number. What do you think it comes in as?" After Pearlstein replied that he thought the cost of the bailouts would be around $1 trillion, Scarborough said, "So we go from 23 trillion to less than 1 trillion? I hope so. I will -- I will do a jig if that happens. That's exciting news." Later, Scarborough asserted that he "learned that we have absolutely nothing to worry about with the bailout culture. That $23 trillion number that economic experts were talking about yesterday -- we're going to make money, nothing to worry about."

In a July 21 article, New York Times reporter Floyd Norris wrote that the $23 trillion figure is a "sheer unreality" and reported that "in the report accompanying his testimony, Mr. Barofsky conceded the number was vastly overblown." Norris said the number includes "estimates of the maximum cost of programs that have already been canceled or that never got under way." Norris also reported of the $23 trillion figure:

It also assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless.

It would also require the Treasury itself to default on securities purchased by the Federal Reserve system.

The sheer unreality of the number did not stop some members of Congress from taking the estimate seriously.

Norris also reported that in an interview, Barofsky said:

"We're not suggesting that we're are looking at a potential loss to the government of $23 trillion," he said. "Our goal is to bring transparency, to put things in context."

Asked what he thought the maximum total cost could be, he replied that it was not his job to estimate that, and declined to give a figure.

In SIGTARP's quarterly report, Barofsky made clear that "potential support" includes programs that "have been discontinued or even, in some cases, not utilized. As such, these total potential support figures do not represent a current total, but the sum total of all support programs announced since the onset of the financial crisis in 2007" (emphasis added):

tarpchart

From the July 22 edition of MSNBC's Morning Joe:

SCARBOROUGH: Well, you know, in 2009 the government's going to account for 40 percent of our GDP -- 40 percent of our GDP. Hasn't been that since World War II, and we were actually winning wars in World War II. And then you add on top of that all these other bills that are going through.

You know, it's a $23 trillion bailout -- $23 trillion in bailout costs that started with George W. Bush and continued through this administration. Yes, we -- we are having trouble affording doing what Nancy Pelosi and Democrats want to do.

[...]

SCARBOROUGH: Let me ask you a question about -- I read yesterday somewhere that the bailouts are now coming in at a price tag of around $23 trillion. Two-part question here. Can you get your arms around what $23 trillion in debt will do to this country in the coming years? That's part one. The second part of the question is: Do we need another stimulus plan to revive the economy despite a $23 trillion price tag to the bailout culture?

PEARLSTEIN: Joe -- Joe -- Mika, help me here.

MIKA BRZEZINSKI (co-host): Yeah.

PEARLSTEIN: Joe, that $23 trillion is a meaningless nonsense number, OK? It assumes that everything that was paid out will never be repaid. Everything that was lent will never be repaid. It's not going to happen, Joe. So don't -- let's not use numbers like that. This is what gets people cynical, OK? So far, all the bank money actually has been paid back by the banks. There's still much to go. But some of the big ones have been paid.

SCARBOROUGH: So, Steven, there's nothing to worry about then. You're make -- you know what I'm going to do? I'm going to go to the beach --

PEARLSTEIN: Yeah.

SCARBOROUGH: -- for the next week and not worry about anything. Don't worry, be happy, right?

PEARLSTEIN: Look, if that -- if that was your big worry, Joe, you should go to the beach.

SCARBOROUGH: I've got a lot of big worries, Steven. Are you telling me that I don't have a reason to worry when the president passes budgets -- hold on -- that the CBO says are unsustainable? That the president admits are unsustainable. When we have in passing one bailout after another over the past couple of years -- George Bush first and then Barack Obama -- that we don't know how much will be repaid. You sit there and smirk about the 23 trillion number. Give me a number. What do you think it comes in as?

PEARLSTEIN: Maybe there are things that you can't know, Joe. This is the problem. You're looking for precision in an area where you don't know.

SCARBOROUGH: No.

PEARLSTEIN: And you just have to make judgments based on that.

SCARBOROUGH: Ten trillion? Fifteen trillion?

PEARLSTEIN: Businesses do it all the time, by the way.

SCARBOROUGH: Ten trillion? Fifteen trillion?

PEARLSTEIN: You know what?

SCARBOROUGH: What do you think?

PEARLSTEIN: I suspect it's going to be a lot less than 1 trillion.

SCARBOROUGH: Less than 1 trillion? So we go from --

PEARLSTEIN: A lot less.

SCARBOROUGH: -- 23 trillion to less than 1 trillion? I hope so. I will -- I will do a jig if that happens. That's exciting news.

[...]

SCARBOROUGH: I learned that we have absolutely nothing to worry about with the bailout culture. That $23 trillion number that economic experts were talking about yesterday -- we're going to make money, nothing to worry about.

Posted In
Economy
Network/Outlet
MSNBC
Person
Joe Scarborough
Show/Publication
Morning Joe
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