11+ Years of TARP

November 6, 2019

Authored by: Robert Klingler

As I have repeatedly written on this site, without regard to other benefits associated with the Troubled Asset Relief Program (such as avoiding a further collapse of the global financial system), the TARP program, and particularly the Capital Purchase Program, was profitable for the U.S. Taxpayer. As a banking lawyer and son and grandson of community bank presidents, I’ll concede that I’m biased. But the numbers speak for themselves.

Even ProPublica acknowledges that TARP was profitable.

Overall, the TARP remains in the black, though just barely.

What does ProPublica means by “barely” profitable? Apparently, “a narrow profit of about $1 billion.”

I hate it when I only have a billion dollars in profit. That’s $1,000,000,000.00 to put it in context.

And even that understates the profitability of the investment portion of the TARP program. ProPublica included $29.9 billion in subsidies to various housing programs that ProPublica acknowledges were never intended to be paid back. Looking just at the investments, ProPublica reports a much a larger profit.

Of the 780 investments made by the Treasury, 636 have resulted in a profit. 138 of the investments resulted in a loss. So far, the profits amount to $48.3 billion, while the losses amount to $17.2 billion. 6 of the investments are still outstanding.

Accordingly, for the portion of the TARP program where the government expected repayment, the TARP program netted a positive return of $31.1 billion. And that probably undersells the value of the TARP program. ProPublica’s total return for all of the bailout programs in its Bailout Tracker, the government has realized a $116 billion profit as of October 2, 2019.

While I may disagree with the presentation/spin presented on much of the information provided, I have no reason to question the underlying data in the ProPublica Bailout Tracker. It’s a well-constructed online database and worth a few minutes of your time to poke around.