Measuring the True Cost of TARP

By Covering Business     March 15, 2012

When Congress established the Troubled Asset Relief Program in October 2008, it authorized the federal government to spend up to $700 billion to help stabilize the markets by purchasing what it called “troubled assets.” It hasn’t spent nearly that much.

At last count, the government had spent about $428 billion to prop up the banks, the auto industry, the mortgage market and the insurance giant AIG.

The law that created the TARP mandates the Congressional Budget Office publish a semi-annual report on its progress. The latest report was published in December. Among its findings:

• The CBO estimates the program’s net cost to the government will be $34 billion, up from its March estimate of $15 billion.

• The CBO estimates that as of November, the automotive industry had received about $80 billion in TARP funds and that $37 billion was still outstanding.

• As of November, the government had spent $3 billion in TARP money on mortgage programs. The CBO projects that will rise to $13 billion over the lifetime of the program.

Read the full report (PDF).
View the CBO’s TARP infographic (PNG).



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