TARP will turn out to be a bargain
- May 11, 2010
- 1 comments
- Posted in Government, Latest Posts, The Economy
You’re not going to want to hear this, but the $700 billion provided for the 2008 Troubled Asset Relief Program (TARP) may be the best money we never entirely spent. Hat’s of to TPM for putting together what we know of the cost so far.
The U.S. Treasury has disbursed $536.6 billion for the programs to rescue banks and the mortgage agencies, Fannie Mae and Freddie Mac. Some $216.8 billion has been returned in repayments or dividends. The Treasury estimates that TARP will eventually cost a net of $117. Fannie and Freddie will need $85 billion more (Fannie asked for $8.4 billion yesterday). That’s expected to be offset by gains of $115 billion in other programs. For example, the government plans to sell off its holdings of Citibank, purchased at $3.25 a share and trading today at $4.20.
By the Treasury’s count, the total taxpayer cost will come to $87 billion–a bargain for pulling the economy back from the abyss. To help put that number in perspective, all the programs of the U.S. Education Department cost $60 billion last year.
The Congressional Budget Office, using different assumptions, puts the eventual cost of the bailout at $250 billion–still a bargain. Neither of these estimates considers the hundreds of billions that could have been lost had the government let the economy slide into a 1930’s-style economic collapse or even a recession far worse than the one we’ve just been through. The cost in human misery would have been immeasurable.
Republican Sen. Bob Bennett of Utah, hardly a liberal’s friend, was just dumped by his party’s even-further-right-wingers, partly for supporting TARP. That makes them even crazier than I thought.
Tags: TARP, U.S Budget, U.S. Treasury
Thanks for putting the cost of TARP into perspective for us folks. I understood some of the justification for the expense when TARP was implemented, but this just snapped it into focus for me.