Competent Government: TARP 70% Repaid

The Troubled Asset Relief Program to rescue the nation's banking industry has been a punching bag for both extremes of the ideological spectrum: if the far Right saw it as a chance to charge the president with taking over the banks, the Left puritans saw it as an outrage precisely because it didn't nationalize the banks. The risk was significant: $700 billion in taxpayer funds. If the Right complained about the President "interfering in the business" of the banks by blocking their corporate jet purchases while they were still on the taxpayer dole, the purity Left failed to see the controls the President did put in place, including compensation restrictions for executives of the banks that were being helped out by taxpayers. Banks needed to be completely nationalized or else, they said.

Either way, both groups - Teabaggers and Firebaggers - argued that it was a big waste of money, and we ain't nevah gettin' it back. Well, I reported in October that the Treasury had by then lowered their cost estimate to $30 billion. Many then argued - especially the all-knowing forces of the Obama-hating ideological left - that Treasury was pulling these numbers out of their rear end, and that it's too optimistic an estimate. They said we'll know when the funds actually are given back.

Well, to that end, the Los Angeles Times is reporting that the Department of Treasury has just with a near $7 billion repayment from AIG, TARP is now 70% repaid.
The Treasury Department has recovered 70% of the money distributed under the $700-billion bailout fund after American International Group paid back $6.9 billion of the money it owed [...]

AIG's repayment brings to $287 billion the total TARP money recovered, the Treasury Department said. Although Congress put $700 billion into the fund, the department disbursed only $411 billion.
And given that, the estimate of the actual cost of TARP has also been modified, by both the Congressional Budget Office and the White House.
The Congressional Budget Office estimated in November that TARP would lose $25 billion. The White House has estimated a $48-billion loss. But with potential profit from the AIG stock, which will be sold over time, the projected loss drops to $28 billion.
Hmm. Now could it be that it actually takes good regulations, good oversight and good management to have a secure financial system and even to rescue the world financial system from the edge of disaster? It sure seems that way. But both ideological extremes have a problem conceding this point: the Tea Party right would have to admit that major government intervention and public regulations are required to keep a free market from becoming a wild one. The purity Left would have to admit that something short of full nationalization has worked.

Since the day President Obama took office, he made the financial rescue program work for the American people - not just the big banks. I have said it before, and I will say it again - the Wall Street rescue did not happen for its sake but because if it disappeared, it would have disappeared along with billions or trillions of dollars in retirement and other investment assets for ordinary Americans - the whole nest eggs for a whole lot of our fellow citizens.

The truth is that the Democratic Congress wrote a bill with accountability, and Barack Obama, after becoming president, carried it out. He subjected banks to stress tests and blocked many of their luxuries until taxpayers were fully compensated. It was not perfect, but it was enacted as an emergency measure. As such, under President Obama's and Secretary Geithner's management, it has worked beyond the wildest dreams of anyone staring down the barrel in September 2008.

This is competent government. This is a job well done. Thank you, Secretary Geithner. Thank you, Mr. President!


Like what you read? Chip in, keep us going.