Remember how we were supposed to make a killing on the interest from the banks that took bailout money? Well, evidently not. This from CQ:
The rescue of the financial industry in 2008 will likely end up costing the federal government $60 billion, according to a new report by the program’s inspector general that challenges the Treasury Department’s positive view of the effort.
The report, a quarterly assessment of the Troubled Asset Relief Program required by Congress, says many smaller banks will not be able to repay the bailout money and that actions in the wake of the financial crisis are likely to leave long-term damage. […]
The public is currently owed $118.5 billion and the report says more than half of that won’t be repaid. Although the total bill will fall far below the program’s initial $700 billion price tag, it belies Treasury claims that TARP will be profitable.
“It is a widely held misconception that TARP will make a profit,” Romero wrote in the Executive Summary. “The most recent cost estimate for TARP is a loss of $60 billion. […]
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