TARP Draws to a Close Next Week, With Lower Costs Than Thought
After countless angry political speeches and the threat of economic collapse, the government's $700 billion bailout of banks, insurance companies and auto companies draws to a close Sunday - and it will likely cost only a fraction of what was expected.
It will be years before it is possible to produce exact figures related to the bailout, which encompassed everything from mortgage finance colossuses Fannie Mae and Freddie Mac to auto company General Motors.
Still, Treasury Secretary Timothy Geithner told President Barack Obama this week that the TARP program, which officially ends next week, will cost the taxpayer no more than $50 billion, The New York Times said.
The taxpayer could even end up with a profit on the various investments.
The program was "a tremendous success," said Brian A. Bethune, the chief financial economist in the United States for IHS/Global Insight.
The program, which was enacted under President George W. Bush, has been widely attacked as crony capitalism at its worst, with the government intervening in private markets to protect wealthy bankers while ordinary Americans struggled.
The federal government planned $700 billion of funds. But the Treasury only tapped $470 billion and disbursed $387 billion. After Sunday, the Treasury cannot commit money to new initiatives or recycle repayments to other schemes.
Fewer than three in 10 Americans believe the program was necessary to prevent the financial industry from collapsing and "drastically hurting the U.S. economy", according to a July poll for Bloomberg News.
"This is the best federal program of any real size to be despised by the public like this," said Douglas J. Elliott, a former investment banker now associated with the Brookings Institution, a Washington think tank.