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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