The Emergency Economic Stabilization Act (EESA) created the Troubled Asset Relief Program (TARP) back in 2008. According to the Treasury Department, which has released glowing reports this year (see here and here), Congress originally authorized $700 billion, reduced in 2010 to $413 billion (p. 3). Those taxpayer funds were used to bail out—rather, purchase assets and equity—from certain members of the banking sector, credit markets, the auto industry, and the housing market (p. 3). Treasury insists:

TARP helped prevent a second Great Depression, stabilize a collapsing financial system, and restart the markets that provide mortgage, auto, student, and business loans. …As of September 30, 2012, American taxpayers have already recovered almost 89 percent of the TARP funds disbursed. Overall, the government is now expected to at least break even on its financial stability programs overall and may realize a positive return.

Wow! We might almost break even or may see a return on our taxpayer “investment.” Gee whiz, that is a great rate by government standards—except it’s not exactly true.

Steve Schaefer of Forbes reviews the latest CBO cost estimate for TARP, $24 billion at last count, representing the outstanding AIG and auto bailouts balances. But Schaefer also notes the OMB puts those costs at $39 billion higher—$63 billion in all.

Last year Neil Barofsky, then departing special inspector general for TARP, appeared before a House Oversight and Government Reform subcommittee. As the Wall Street Journal reported, Barofsky testified:

TARP's most significant legacy may be the exacerbation of the problems posed by ‘too big to fail,’ particularly given the manner in which Treasury executed the bailout, largely sparing executives, shareholder, creditors and counterparties, reinforcing that not only would the government bail out the largest institutions, but would do so in a manner that would do little harm to the responsible stakeholders…