TARP Unbound

| Mon Dec. 7, 2009 2:06 PM EST

The much-derided TARP program has turned out to be remarkably successful:

The White House had projected in August that the $700 billion Troubled Assets Relief Program, or TARP, would lose about $341 billion over the next 10 years. But officials scaled back the estimate after once-shaky Wall Street firms began recovering much more quickly than expected. In addition, several TARP initiatives have been funded at a smaller amount than originally planned.

....The new, more optimistic estimates of TARP losses could pave the way for Democrats to tap some of the program's unspent funds for a jobs bill currently being crafted in the House. White House press secretary Robert Gibbs said Friday that President Obama is likely to discuss such a plan during a speech Tuesday at the Brookings Institution.

....Some leading Republicans are opposed to proposals to use TARP funds for job creation, saying it would violate the intent of the law. These lawmakers say they simply want the program to end. "The money went out to financial institutions. Now it's coming back, and as it comes back, what we ought to do with that money is use it to reduce the budget deficit," House Minority Leader John A. Boehner (R-Ohio) said on Bloomberg TV last week.

It was always a mystery to me why so many people insisted that the program was likely to have a net cost of $700 billion, when that was never remotely likely in any scenario short of a full-on rerun of the Great Depression.  In the end, it's been extremely successful and surprisingly cheap, even cheaper than I suspected at the time.

In related news, I'd say that John Boehner is quite correct in theory and abysmally wrong in practice.  But at least that's better than his usual batting average.

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