Wait... TARP turned a profit?

The much-maligned Wall Street bailout program has made American taxpayers $25 billion richer. Will this make them hate it less?

The politically condemned Wall Street bailout earned the government $25.2 billion on its original $309 billion investment in banks and insurers.
(Image credit: Corbis)

The 2008 "bank bailout" may be political poison, but it has turned out to be a financial success, Bloomberg reports. The federal government has earned $25 billion on its $309 billion investment in banks and insurers through the Troubled Asset Relief Program (TARP), equalling a hefty 8 percent return at time when treasury bonds yield only 3 percent. Still, TARP — passed by George W. Bush and enacted by President Obama — has been a net loss in "political capital" for Democrats and for lawmakers from both parties who voted for it. Should this redeem politicians who voted for it?

Turns out TARP was a "pretty-good investment": You have to feel bad for all the lawmakers who "will lose their jobs" in November for supporting TARP, says Ezra Klein in The Washington Post. This "unjustly maligned" program probably, "when all is said and done," will earn taxpayers a tidy profit — and the $25 billion "doesn't even count the benefits of avoiding the wholesale collapse of the financial system."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us