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Ear to the Ground

Treasury Projects a Profit From Bailout

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Posted on Apr 15, 2012
U.S. Treasury

Just as Mitt Romney has locked up the Republican nomination on a boast of fiscal conservatism, President Obama’s Treasury Department has said it expects to turn a tidy $2 billion profit from TARP and other extraordinary measures taken to bail out the financial industry.

As the BBC reports, “The vast majority of the projected returns—more than $179bn—come from the Federal Reserve’s huge investments and loans to banks.”

While the auto bailout is included in Treasury’s calculations—it was a part of TARP, after all—not all government spending on the meltdown has been factored in. To quote from Treasury’s own report: “These estimates do not include the full impact of the crisis on our fiscal position. And they do not include the cost of the tax cuts and emergency spending programs passed by Congress in the Recovery Act and after that were critically important to restarting economic growth.” They also do not seem to include the Federal Reserve’s monetary policy, which involves the kind of math that keeps one awake at night.

Among the many graphs and charts released by Treasury, there’s a recurring motif: a line shaped roughly like a V with little spikes and dips along the way, spanning 2007-2011. Next to the nadir of this line, just before it makes a sharp turn and begins heading in a positive direction, are the words, “President Obama takes office.” It’s a campaign poster. Expect to see it often.  —PZS

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vector56's avatar

By vector56, April 17, 2012 at 4:29 pm Link to this comment

“If the rethugs hadn’t filibustered every idea Pres Obama had even if it was
originally a rethug idea, things would be a lot better. “

eps62;

I am assuming your above statement was an attempt at “irony”?

If not, you can’t be serious! I do not remember voting for Obama to push “rejected” Heritage Foundation ideas like;

Pay Roll Tax Holiday
Cap & Trade
Individual Health Care Insurance Mandate

All of these “scams” were rejected by the public when the Republicans were pimping them. If anything it is clear that Obama was a “Trojan Horse” cloned in the basement of the Heritage Foundation.

As far as the government making a profit on tarp; bull shit!

The bottomless pit of “toxic assets” dumped on the public are still out there and according to Richard Wolfe and Nomi Prins the “shit has yet to hit the fan”! There 16 Trillion in bad assets still floating around out there waiting to come down on us like a ton of bricks.

If I loaned you 700 billion cash and also took on your debt (toxic assets) of 16 trillion; you pay back the cash and declare “we are even”!  Are we really that thick?

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eps62's avatar

By eps62, April 16, 2012 at 12:51 pm Link to this comment

If the rethugs hadn’t filibustered every idea Pres Obama had even if it was
originally a rethug idea, things would be a lot better.

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By satumma, April 16, 2012 at 11:11 am Link to this comment
(Unregistered commenter)

banks get to clear out a bunch of bad debt, govt gets
their money back… so, who gets left holding the bag?
the money came from somewhere…

its a game of musical chairs (debt) where the well
connected banks are already seated at all the chairs
and the rest of us are running around waiting for the
music to stop, so they can declare us the losers of the
game…

and then take our stuff.

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By Miko, April 16, 2012 at 8:17 am Link to this comment
(Unregistered commenter)

The problem with using this as a pro-Obama argument is
that one implicitly has to argue that things have
gotten better since Obama became president.  While that
may be true for billionaires, it isn’t really true for
anyone else.  If Obama were to say “Oops, I goofed;
next term I’ll do the exact opposite of what I did the
last four years,” he’d do much better than he would if
he were so idiotic as to claim that the present
economic situation is good (as long as you don’t count
all the data that shows that it’s really bad) due to
him.

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