The U.S. Treasury Department’s own Inspector General for the Troubled Asset Relief Program, or TARP, on Wednesday contradicted a previous Treasury statement that the bank bailout program was profitable.
In its quarterly report to Congress, the Special Inspector for TARP said “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,” adding that “taxpayers are still owed $118.5 billion (including $14 billion written off or otherwise lost).”
This directly contradicts a statement by the Treasury in late March, after the agency took losses of $48.8 million after its decision to auction its preferred shares in six banks owing TARP money at a discount, that it had “recovered $260 billion from TARP’s bank programs through repayments, dividends, interest, and other income – compared to the $245 billion initially invested,” so that “each additional dollar recovered from TARP’s bank programs is an additional dollar of profit for taxpayers.”
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