Taxpayers Still In Hole $133 Bil From Gov't Bailouts
In 2010, the newspapers were full of reports of companies "paying back" loans under the $700 billion Troubled Asset Relief Program (TARP).
Over and over, Democratic politicians and left-leaning pundits suggested the money would not only be paid back, but that taxpayers might even profit from it. And even if the money could not be recovered, they said, a depression has been averted.
Well, here's some news for them, courtesy of the Associated Press: "U.S. taxpayers are still owed $132.9 billion that companies haven't repaid from the financial bailout, and some of that will never be recovered."
It may be even worse than that gloomy prognosis delivered to Congress on Thursday. The federal government has already written off $12 billion, and it may take years — if ever — to get the rest of the money owed by the 458 companies it "invested" in.
Take General Motors. The government break-even on its GM investment is $54 a share. GM closed Thursday at $24.72 a share. But in his State of the Union speech Wednesday, President Obama touted the success of the auto bailout, noting that GM is now "back on top as the world's No. 1 automaker."
Technically, he's correct. But only because Toyota's output was decimated by last year's tsunami and other Asian automakers were hammered by the floods that inundated Southeast Asia.
Truth is, auto analysts expect GM and Chrysler to lose market share this year as Asian automakers and a revived Volkswagen rebound from a disastrous year. But never let a few facts get in the way of the Democratic narrative.
Then there's Fannie Mae and Freddie Mac, the two government-sponsored enterprises largely responsible for the financial meltdown. Still losing money hand over fist, they have chug-a-lugged $183 billion in taxpayer aid and will need even more. That money will never be paid back. Ever.
We also know the Federal Housing Administration's $1.02 trillion loan portfolio is underwater. It hasn't asked for a bailout — but it will.
Yes, the president promised during his speech there would be "no bailouts" from now on. But in fact, his newly unveiled plan to refinance millions of Americans' mortgages amounts to a gigantic bailout.
And as TARP's acting inspector general Christy Romero noted, "Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion."
Fact is, TARP has already cost the country dearly — and is likely to cost more. Aided by the "stimulus" and the Fed's massive money printing program, the government's bailouts have introduced huge new distortions into U.S. markets — a hidden tax on the economy that we'll be paying for years to come.
Above from an Investor's Business Daily editorial.
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