The public was not aware of the distributions of this money.
Is any of the money loaned held in reserve? What is the risk to the public? What is the risk to the two women? How much has been spent to buy loans? If it hasn't all been spent why not and is there a time limit?
Much of the confusion in this thread seems to stem from Taibbi doing a very poor job differentiating between the Treasury and the Federal Reserve. This supposedly super duper secret shadow budget is the Fed's, not the Treasury's.
The Treasury collects taxes, fines, even gets the Fed's profits annually and so on. This is what is generally considered to be public money. The Fed does not collect taxes and does not spend any tax money. It creates and destroys base money when it buys, lends, sells and collects debt.
To answer your question, loans from the Fed include no risk to the public in a traditional sense, taxpayers are not on the hook if a loan is not repaid. Ron Paul and his ilk would be quick to point out that creating money creates a risk of inflation, although we aren't talking about amounts significant enough to do that, I suppose you could consider that to be the public's risk. Public money, held by the Treasury, is not at risk when the Fed makes a loan.
There are so many ways to exploit $220M. If I put up $15M but there is no requirement for me to use all of the money for the loans then there is no risk. If there is no time limit I can put off using $15M.
Again, why was the distribution of these funds kept secret? Has there been an accounting? How much risk do these women assume? It stinks.
Ron Paul and his like minded goons got one of their few ever victories in their crusade against the Fed with this. Long standing policy was overturned to force the Fed to immediately disclose the recipients of loans. This supposed secrey was in place for a multitude of reasons, most importantly:
1. To protect against bank runs. In its capacity as the lender of last resort the Fed lends money to banks for a variety of reasons, including so that they can meet their reserve requirements. These are typically overnight loans. If a bank is in serious trouble there is the machinery in place with the Fed, FDIC, SEC and so on to take over and transfer the bank while protecting the deposits of its customers. Needing an overnight loan does not necessarily mean that the bank is in any serious trouble. The "secrecy" is to prevent misunderstandings leading to bank runs.
2. Perhaps more importantly, to keep the congress out of monetary policy. Laws governing the Fed have long been designed to keep the congress out of its day to day decision making. The congress has oversight, including auditing, and plays a role in the appointment of Fed leadership but is to stay away from its day to day business. This is significant. Poor monetary policy can be catastrophic and easily abused. For example, it wouldn't do us any good if congress could say, "you can't lend that bank money, they didn't contribute as much as we wanted to our campaigns, err, scratch that, their business model is bad." Additionally, monetary policy directed for short term reelection purposes, rather than the long term good would be a disaster. And if you think they are bad with public money, imagine how out of control they would get with base money creation.
You could always develop a general idea of what the Fed is up to by following its weekly updates to its balance sheet, but some of the specifics of loan recipients were not immediately released. This "secrecy" has long fueled conspiracy theories but was in place for much more mundane reasons.
