Revised TARP cost estimate: $87 billion

Posted by Sir Four at 3:37pm Apr 25 '10
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TARP freed up $700 billion to stabilize lending instutions. A year ago, the Obama administration estimated TARP would yield a $500 billion net loss to the government. Today this has been revised down to $87 billion, due to "lower utilization, faster repayment and improved financial conditions."

More:

[The losses include] $48 billion that went to AIG, $28 billion to General Motors, Chrysler and their financing companies, and $49 billion to help homeowners facing foreclosure. Offsetting those losses somewhat are projected net gains of $9 billion from several Treasury TARP programs aimed at helping banks recover.

Separately, help for mortgage finance titans Freddie Mac and Fannie Mae, now in government conservatorship, should account for $85 billion in other losses.

However, earnings on the Federal Reserve's creative finance programs not only saved many banks from going under, but they're also now projected to earn $115 billion more than they cost.

A year ago, the Obama administration figured the total cost of all the recent bailouts could be more than $500 billion, or 3.5 percent of the gross domestic product.

"We now expect that the direct costs of all our interventions will cost less than 1 percent of GDP," Geithner wrote. "This means that the federal deficit and debt will be substantially lower than previously expected."

This is great news. So much for that "falling person" libertarian video. =P