"Treasury currently estimates that bank programs within TARP will
ultimately provide a lifetime profit of nearly $20 billion to
taxpayers," Treasury said in a recent news release. But if taxpayers
make $15 billion off AIG alone, the total figure could climb much
At the time, friends warned me that creative accounting would kill me. Looks like they were right:
True, the notion of a TARP "profit" requires some creative accounting.
numerous critics have pointed out, much of the reason for the windfall
comes from the removal of much of the toxic crap from bank balance
sheets onto the already hideous balance sheets at Fannie Mae and
National Taxpayers Union calls the profit "a myth, a fiction of
Washington accounting...because the banks that got bailed out through
TARP shuffled all their bad assets over to Fannie Mae and Freddie Mac,
which got their own separate bailout. So, really, it should be no
surprise that they're relatively healthy."
I always took this possibility seriously, but was willing to bet that I'd win despite creative accounting. Any chance the next two years will vindicate me?
Win or lose, I'll continue to look down on the many prominent proponents of TARP who refused to bet me. And so should we all.