Time to Explain Citi, Bank of America Bailout: Today's Outrage

NEW YORK (TheStreet) -- American taxpayers are lucky that the government's bank bailout didn't destroy the financial system.

That pretty much sums up the Congressional Oversight Panel's review of the bailout, released today.

The panel's report is peppered with phrases like "moral hazard", "considerable risk to taxpayers", and "price distortion."

The report takes a slightly indigant tone at times and demands that the Obama administration start justifying its actions.

Singling out Citigroup (C Quote) and Bank of America (BAC Quote), which received hundreds of billions of dollars in asset guarantees, the panel said the Treasury needs to provide an analysis of why those two banks were selected for the asset guarantee program and not others.

Citi and Bank of America, along with AIG (AIG Quote), Chrysler, GM and GMAC, represent parts of the bailout that are likely to be "enduring and costly to taxpayers," the report said.

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Considering the amount of risk placed on taxpayers, the American public deserves more transparency about the choices made by government officials and whether they achieved their objectives, the panel said. In other words, let's see a little government accountability!

"The American taxpayer stood behind guarantees of high-risk assets held by potentially insolvent institutions," according to the executive summary of the report. "It was possible that, if the guaranteed assets had radically declined in value, taxpayers could have suffered enormous losses."

Most damning of all is the panel's conclusion that the implied guarantee backed by the full faith and credit of the United States "can lead lenders to engage in riskier behavior than they otherwise would."

Talk about the law of unintended consequences.