Contrary to the Obama administration’s claims, the bailouts of the financial and auto industries have not turned a profit for the U.S. government and may never turn a profit, according to a grim new assessment by the bailout’s watchdog.
Even by non-financial standards the bailout has been less than a roaring success and may be helping to lay the groundwork for future financial disasters and bailouts, writes Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, in her latest quarterly report to Congress, released Wednesday morning.
“It is a widely held misconception that TARP will make a profit,” she writes right at the top of her 327-page report. “The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).”
That directly contradicts the Treasury Department’s repeated claims that the government will eventually at least break even on the bailout. So far, the government has gotten back about $300 billion of the $414 billion it has paid out to banks, but some banks paying back TARP have simply used other government money to do so, asThe Huffington Post and the Wall Street Journal have reported.
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