What do you think of TARP? (If you don't recall what the acronym stands for, it's Troubled Asset Relief Program, the bill passed almost exactly two years ago to save some financial institutions and automakers who were deemed "too big to fail"). Bailout is probably the first word that comes to mind. A $700 billion giveaway, to some.
Here is a pleasant wrinkle on the story. The ultimate cost of TARP will be far, far less than $700 billion. It's not all in the books but here are current estimates as the program winds down.
http://www.nytimes.com/2010/10/01/business/01tarp.html?_r=1&scp=2&sq=tarp&st=cseA couple of snippets --
When Mr. Obama took office, the financial system remained so weak that his first budget indicated the Treasury might need another $750 billion for TARP. The administration soon dropped that idea as Mr. Geithner overhauled the rescue program and the banking system stabilized. Still, by mid-2009, the administration projected that TARP could lose $341 billion, a figure that reflected new commitments to A.I.G. and the auto industry.
The Congressional Budget Office, which had a slightly higher loss estimate initially, in August reduced that to $66 billion.
Now Treasury reckons that taxpayers will lose less than $50 billion at worst, but at best could break even or even make money. Its best-case assumptions, however, assume that A.I.G. and the auto companies will remain profitable and that Treasury will get a good price as it sells its corporate shares in coming years. The program remains deeply unpopular with voters and has cost some legislators who voted for it their seats.
Among those who voted for the program in 2008, several Republicans have lost nominating contests for re-election or for another office, and others are on the defensive in fall races.
Senator Robert F. Bennett of Utah was “Bailout Bob” to Republicans who refused to re-nominate him for a fourth term.
“For those who were screaming at me — and screaming was the operative word — ‘You’ve just saddled our children and grandchildren with $700 billion,’ I said, ‘No, I haven’t,” Mr. Bennett said in an interview.
“My career is over,” he added. “But I do hope that we can get the word out that TARP, number one, did save the world from a financial meltdown and, number two, did so in a manner that, I believe, won’t cost the taxpayer anything. And even if it did not all get paid back, it was still the thing to do.”
