The website ProPublica has a report on the TARP bailout that suggests the mammoth lending program will not turn out to be a fiasco for the taxpayers after all: The government’s best estimate, released December 10, is that the bailouts of AIG and the auto companies will ultimately cost taxpayers about $61 billion. It also forecast that other parts of the TARP will end up making taxpayers money. Put it all together, and the final estimated loss from the bailout’s first full year (thru September 2009) is about $41.6 billion…. [Table omitted] It’s certainly true that the picture has brightened in the past year. When the Congressional Budget Office took a look in January at the TARP’s main bank bailout program, it estimated that the government was about $32 billion in the hole from those investments. With the freshening of the economy and recent reimbursements by the major banks (Bank of America in particular), the Treasury now forecasts that the program will end up making the taxpayer about $15 billion. The bailout, as just about everyone knows, has been a major issue in the sparring between the Perry and Hutchison camps as the March 2 Republican primary approaches. The Perry campaign has run ads criticizing the bailout as emblematic of what is wrong with Washington and refers to Hutchison as Kay “Bailout” Hutchison. In a taped interview that aired on WFAA, the ABC affiliate in Dallas, in late November, Hutchison said, according to a story in the Dallas Morning News, that she had “made a mistake” by supporting the $700 million bailout and would change her vote if she had the chance. The story quoted her as saying, “If I knew how the money was going to be spent, I would take it back in a heartbeat. They spent money not on helping the housing industry, which was the problem, and helping the financial institutions lend money. Financial institutions today are not lending money to help small business get up and going.” It is indeed ironic that the vote that has dogged her from the moment that she announced her candidacy in December 2008 may turn out to have been a good deal for the taxpayer and will prove to have been a brave and responsible vote that achieved what it was supposed to achieve, which was to save the world financial structure from imminent collapse.
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