Hey, do you remember all those stories about how the Troubled Asset Relief Program not only avoided a total meltdown of the financial system but had turned a profit? You know, the ones with headlines such as "We Made a Profit on TARP!"?
Chew on this, from the special inspector general of TARP:
After 3½ years, the Troubled Asset Relief Program ("TARP") continues to be an active and significant part of the Government's response to the financial crisis. It is a widely held misconception that TARP will make a profit. The most recent cost estimate for TARP is a loss of $60 billion. Taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).
And if that doesn't catch your fancy, check out this:
Only 9% of the TARP funds set aside for mortgage modifications have been spent to help a fraction of eligible homeowners after more than three years. Additionally, despite the fact that Treasury designed the Hardest Hit Fund to address unemployment and underwater homes as causes of foreclosure, after two years, only 3% of the funds obligated have been spent to help only approximately 30,000 homeowners.
One enduring legacy of TARP is criminal activity associated with the program. SIGTARP investigates crime related to TARP and actively supports the prosecutionof individuals it investigates.
Hat tip: Zero Hedge's "George Washington, who notes:
Bailing out the big banks hurts – rather than helps – the American economy. See this, this and this. Indeed, bailing out the big banks hurts – rather than helps—the American economy. See this, this and this. (And it doesn't take a PhD economist to guess that using bailout funds to buy gold toilet seats and prostitutes is probably not the best way to stimulate the economy as a whole).