By Chuck Missler

On October 3rd, Congress gave the treasury department the power to buy up almost a trillion dollars in "toxic assets." If you believed the hype, the Troubled Asset Relief Program (TARP) was supposed to stabilize the financial sector through the purchase of mortgage-backed securities. However last week Treasury Secretary Henry Paulson dropped a bombshell on the American taxpayer. On Wednesday Paulson announced that the funds allocated for the Troubled Asset Relief Program won't actually be used to purchase troubled assets. Instead, our tax dollars are being used to buy massive shares in large banks like JP Morgan Chase, Goldman Sachs, Bank of America, and Wells Fargo - with virtually no strings attached.

The Treasury Department had originally intended to employ market based auctions, sometimes called reverse auctions, to buy up mortgage-backed securities at below market prices. In fact, that was the gimmick Paulson used to sell the idea to Congress in the first place. However he now claims that the purchase of toxic assets "is not the most effective way to use the funds." Paulson's dramatic announcement has left many taxpayers - and even some lawmakers - feeling hoodwinked.

The bailout bait-and-switch is just the tip of the iceberg. It has become clear that the $700 billion dollar Troubled Asset Relief Program lacks both sufficient oversight and transparency. The Washington Post reported that "in the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders. Along the way, the Bush administration has already committed $290 billion of the $700 billion rescue package. Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed."

Meanwhile, the US economic crisis isn't getting any better. New financial data shows that home foreclosures increased 25 percent last month when compared to the same month last year. Almost 300,000 homes received foreclosure notices in October. That's about 1 out of every 450 houses, a 5 percent increase from September. By the end of the year, there will be more than a million bank-owned properties on the market - that's approximately one-third of all properties for sale in the United States.

During the same time period the unemployment rate rose to a 14-year high of 6.5 percent. According to the Labor Department, applications for unemployment benefits have likewise risen to a 7-year high. Not since the September 11 attacks have so many people filed for unemployment benefits.

In the month of October it is estimated that the government budget deficit increased to 101.5 billion dollars, compared to 57 billion in October 2007. The US is expected to run up a record deficit for the current budget year of between 700 billion and 1 trillion dollars.

Our current predicament is the result of years of bad economic policies, out-of-control spending, lax accountability, and greedy and irresponsible behavior. The $700 billion bailout is the largest in US history, yet it does not address the root of the problem.