Courtesy of Pam Martens
Landing in our inbox this week was an 86 page report from the Government Accountability Office (GAO) on the current status of the Troubled Asset Relief Program (TARP). The GAO is among a growing octopus of taxpayer-funded bodies attempting to reassure the American people that their tax dollars that were used to bail out Wall Street during the financial crash are being properly tallied up. The GAO report found the following:
“While the total disbursed for TARP programs was $430.1 billion, OFS [Office of Financial Stability, an office in the U.S. Treasury Department] has collected $424.9 billion (or $442.4 billion if including the $17.5 billion in proceeds from the additional Treasury AIG shares) through repayments, sales, dividends, interest, and other income. As of September 30, 2015, only $714 million in bank investments remain outstanding.”
Lumping dividends, interest and other income together with the repayment of principal is not really fair since money has a time-value and any investor expects to earn a return on money loaned or invested.
SIGTARP, the Office of the Special Inspector General for TARP, released its most recent report on October 28, 2015. According to SIGTARP, as of September 30, 2015, TARP “had $35.1 billion in write-offs and realized losses…” SIGTARP adds this for good measure: “Treasury’s write-offs and realized losses are money that taxpayers will never get back.”
In addition, according to SIGTARP, the $35.1 billion in write-offs and realized losses “do not include $18 billion in TARP funds spent on housing support programs, which are designed as a Government subsidy, with no repayments to taxpayers expected.” If you add those two amounts together, that’s $53.1 billion the taxpayer is never going to get back.
The Congressional Budget Office (CBO) has its own methodology and its own view of TARP. According to its March 2015 report, it estimates that “all told, the TARP’s transactions will cost the federal government $28 billion. That estimate accounts for the realized costs of completed transactions and the estimated costs of outstanding and anticipated transactions.” CBO’s March 2015 report said that TARP had written off $50 billion in losses.
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