The WSJ says that the Obama administration expects to lose $141bn from TARP, down from previous estimates of $341bn. The NYT says that the Obama administration expects to lose $42bn from TARP, down from previous estimates of $341bn. It's not that I'm not grateful, but where'd the NYT find that extra $99bn?
Turns out, it's buried:
The officials said the government could ultimately lose $100 billion more from the bailout program in new loans to banks, aid to troubled homeowners and credit to small businesses.
But that's the pessimistic projection, and I'm feeling good today. Check it out: the bank bailouts, subject of much consternation and populist rage, will actually make the government money. About $19bn, in fact. A certain somebody saw this one coming. So where are these losses coming from? Main St. (and London):
The estimated $42 billion in losses is a net figure that accounts for some profits to offset the losses. The Treasury officials said the government had lost about $60 billion, roughly half to Chrysler and General Motors and the other half to the insurance giant American International Group.
Had we not bailed out GM and Chrysler, we could've saved the entire global economy for about $30bn, maybe less. Call me a statist, but I think that's a friggin' bargain.