Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system.

However, six months later as the Fed lends far more money from the United States Treasury than the Troubled Asset Relief Program (TARP) , Americans have no idea where their money is going or what securities the banks are pledging in return.

The Federal Reserve continues to refuse to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral under the economic rescue package passed by Congress several months ago.

In fact, the Fed's has greatly expanded its lending activities in the last few months. Using its power to create additional money, the central bank has more than doubled its "balance sheet" of holdings to about $2 trillion, from $900 billion since last September.

Meanwhile, an effort by Bloomberg to get information about the trillions of dollars of Fed lending under the Freedom Of Information Act is being fought by the Fed's Board Of Governors. The information is stored at the Federal Reserve Bank of New York, which the Fed contends isn’t subject to Federal law.

So, its really not surprising that a report by a House oversight panel, reportedly scheduled to be released this week (Washington Post), will raise important questions about the billions of taxpayer funds used by the Fed to capitalize the major banks.

Certainly, there should be controversy about a $8 billion financing deal for Dubai by Citigroup (recipient of at least $45 billion in taxpayer bailout funds). Undoubtedly, questions will also be raise about a $1 billion investment in India by J.P. Morgan (which got $25 billion from the government rescue). In addition, the report will highlight a huge $7 billion investment in China by Bank of America (which got $45 billion from the bailout).

Taxpayer money used by troubled banks for global expansion plans will result in the foreign outsourcing of jobs even as more than half a million Americans become unemployed every month. The banks foreign investments also do nothing to alleviate the domestic credit crunch.

Trillions of taxpayer dollars being printed and injected into banks by the Fed with the claim that the information is not subject to Federal law. The result is a complete lack of oversight by elected officials.

In addition, there is no transparency on what institution is receiving the money and how the money is used or what collateral is being given in return. It is a formula for economic abuse and our elected officials should be demanding more Federal Reserve transparency and oversight in the process.

Thomas Jefferson knew the potential dangers of this entire process many years ago. He said: "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

This is what happens when taxpayer money is printed and used to bail out the bad behavior of greedy banks without rules, regulation, or transparency. The Treasury is currently being raided without any oversight and the increase in the money supply will result in the prospect of much higher inflation in the not too distant future.

So, as billions of dollars of taxpayer dollars are lost and the prospect of hyper inflation rears its ugly head, the great taxpayer swindle of 2009 will be remembered as the primary cause of economic pain in the years ahead.

Government intervention in the banking sector may now be necessary but it seems that the time has come for far better government oversight over the actions of the Fed.

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