The NY Times:
When Mr. Obama took office, the financial system remained so weak that his first budget indicated the Treasury might need another $750 billion for TARP. The administration soon dropped that idea as Mr. Geithner overhauled the rescue program and the banking system stabilized. Still, by mid-2009, the administration projected that TARP could lose $341 billion, a figure that reflected new commitments to A.I.G. and the auto industry.
The Congressional Budget Office, which had a slightly higher loss estimate initially, in August reduced that to $66 billion.
Now Treasury reckons that taxpayers will lose less than $50 billion at worst, but at best could break even or even make money. Its best-case assumptions, however, assume that A.I.G. and the auto companies will remain profitable and that Treasury will get a good price as it sells its corporate shares in coming years.
“We’d have to be very lucky to have both A.I.G. and the auto companies pay us back in full,” Mr. Elliott said.
So we staved off a possible Depression at less than the cost of one year in Iraq or Afghanistan, and people are angry about this? TARP might be the most successful, most efficient government program of the past 20 years. Yes, I understand it looked bad for the feds to be guaranteeing the profits of bankers when millions of ordinary people were losing their jobs, but my answer to that is that we should have doubled the size of the stimulus. The big banks really are crucial to our economy, and their failure would have been disastrous for millions more non-bankers than bankers. The mistake that led to this disaster was the deregulation of the financial sector that took place under Reagan and Clinton, and Obama and the Democratic Congress passed a major law to make this less likely, and from what I read people are angry about that, too. Yay, democracy.