TARP Costs Are Back Up

TARP Costs Are Back Up — The Troubled Asset Relief Program (TARP)  was signed into law by President Bush a month before the 2008 election and authorized spending $700 billion to buy assets and equity in financial institutions. The plan was to prevent an economic meltdown due to the subprime mortgage scam.

It was originally expected that taxpayers would be on the hook for $300 billion but the spending authorization was cut to $475 billion in the Dodd-Frank regulations passed in July 2010 and by March 2011 the total  cost estimate for the taxpayers had been cut to $19 billion as the banks and other institutions began paying back  loans.

On Friday the Congressional Budget Office announced the cost estimate is back  to $34 billion due to a drop in the market value of the government’s investments in American International Group and General Motors.

So how is that Chevy Volt working out? Maybe D.C. should have invested in Ford. Oh, that’s right. Ford threw the money back in their faces.

I see Fords in our futures assuming you think it desirable to buy American.

TARP was basically a scheme for wealthy, connected people to be able keep their homes in the Hamptons and their chateaus in Aspen. If Congress simply raised the federal deposit insurance from $250,000 to $2.5 million, the irresponsible banks would have failed, the deposit holders would have transferred their money to the responsible banks,  and justice would have prevailed.

The bad guys would have got bloody noses. The little guy wouldn’t have been hurt any worse than he was and maybe not even as badly.

And we would not have ended up with the Dodd-Frank travesty.

And maybe even John McCain would be president.

Hat tip Tom C.

 

TARP Costs Are Back Up

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