According to Daniel Gross of Yahoo Finance it is but you may never know it from any decent news coverage besides here. I guess it stands to reason that if enough people tell you that the sky is falling, pretty soon you will begin to feel pieces of clouds hitting you in the head. Even if the proof is but a paragraph away. “The price to taxpayers of the bailouts and financial rescue of 2008 and 2009 continues to fall sharply. In figures to be released later today, the Treasury Department will report that the final net cost of the TARP is expected to be about $50 billion, Yahoo! Finance has learned.” “Add in expected returns from Treasury’s interest in insurance company AIG, and the final net cost will be closer to $30 billion.” “The news of the shrunken cost, which comes on the two-year anniversary of the legislation that created TARP, represents a dramatic improvement.” “In an interview this morning, Treasury Secretary Timothy Geithner credits several forces with bringing the cost down.” Says Gross “TARP has been an enormous success from a policy perspective – it saved the financial system and averted a second Great Depression at a very low price to taxpayers.” “But politically, like the assets it was designed to remove from banks, it remains toxic.” (Gross, Daniel, 10/05/2010, Yahoo Finance, Exclusive: Treasury’s TARP, AIG Bailout Costs Fall to $30 Billion, Retrieved from www.yahoo.finance.com).
Whether you wish to take Mr. Gross’ word for it or not I challenge you to take a few minutes and research the topic for yourself. Do not just look for the negatives but also examine the positives and decide for yourself. History teaches us that anything new shall always be met with skepticism and doubt but if we can allow ourselves the opportunity to be wrong sometimes then we can learn a great lesson. For those who opposed this action called TARP, we can only assume what the results would have been had they won the day. Some can argue that when Hank Paulson approached congress with this idea, he came to them with a single sheet of paper and it was the Obama Administration which formed this single sheet into a successful program. Some could argue that stepping in and saving these industries will always remain a bad decision and the Obama Administration made it worse by supporting this program of the past administration. I, personally, find it hard to understand how this could be anything but a win from looking at the results. Mr. Gross may be wrong but so also would be the numerous economists who have said the exact same thing. Could all of them be wrong?
When the idea of TARP was first reported I was dead set against it. I felt like we were rewarding Wall Street and those big banks for gambling with this economy and the livelihood of so many Americans. I was even more disappointed when the present administration doubled down on this program. I was wrong and I am not afraid to admit it. I fear not admitting when I make a mistake because I am well aware that without failure, I will never know success.