TARPY Goodness

Today, Sunday, the Troubled Asset Relief Program, or TARP, comes to a close. Two points. This was Bush's baby, and strongly supported and run by Obama. Now, two years later, and after much hullabaloo about bailing out "THE BANKS" at taxpayer expense to the tune of $700, we see that the program was largely successful. If anyone has suggested you could prevent the collapse of our economic system for $100 billion or less, those with a clear understanding of these matters might have laughed.

Yet here we are, and better for it.

A wildly unpopular government rescue program credited by economists with preventing another Great Depression will go out of business Sunday, two years to the day it was created.

On Oct. 3, the Troubled Asset Relief Program, known as the bank bailout bill, loses authorization to make new expenditures. From that point forward, TARP will be in wind-down mode, although much of money lent out already has been repaid - at a profit for taxpayers.

Originally envisioned as a blank check for the government to spend as much as $700 billion to rescue the financial system, the actual cost to taxpayers is estimated now to be only a seventh of that amount. The government has earned almost $13 billion in dividends from the bank stock it received in exchange for the taxpayers' investment, and earned another $8.2 billion from the sale of preferred stock.

The Treasury Department estimates that taxpayers are still on the hook for about $100 billion at this point - a number expected to shrink with continued repayments and asset sales. The nonpartisan Congressional Budget Office recently put the estimated total TARP cost at around $66 billion.

(Miami Herald)

Don't expect many of the candidates to herald any of this. A certain portion of the electorate is caught between personal ignorance and shotgun dissatisfaction and lacking a framework to address the hydra that is our economic situation. The Tea Party in particular has formalized and personified this ignorance with a slate of candidates that will be entirely useless should they actually get hired by voters. Intellectual garbage in, intellectual garbage out.

Sen. Mike Johanns, R-Neb, said, "TARP turned out to be a slush fund,"  and it's this type of nonsense that we should expect to hear repeated, no matter how stupid or unreflective of what it means to do nothing and let credit dry up for the entire financial, corporate or entrepreneurial sector. You cannot hold capitalism in your right hand and indifference to credit markets in your left, clap, and make a coherent sound.