Yes, some of us are still keeping track of this. Especially those who saw the necessity and logic of these bold initiates, and believed the early estimates and projections of actual cost and likely offsets offered by the administration.WASHINGTON - Treasury Secretary Timothy Geithner is telling Congress that the administration believes the final cost of the government's heavily criticized financial bailout effort could be as low as $87 billion. Geithner made the new estimate in a letter Friday to congressional leaders that was obtained by The Associated Press. A year ago, officials were estimating the bailout could cost as much as $500 billion [and which at first had been estimated at $700 billion, or much more by many].
The administration had already lowered the cost of the $700 billion bailout program, known as the Troubled Asset Relief Program, to $117 billion. That [includes] the losses from the auto [$28b], AIG [$48b] and the mortgage foreclosure programs [$49b] and earnings of up to $11 billion from several other programs under TARP.
In addition to the $117 billion in TARP losses, the administration is estimating losses of $85 billion from the support to Fannie Mae and Freddie Mac. Those two categories of losses would be offset by the $115 billion in earnings the administration expects will be realized from the Fed's support programs. The biggest offset to those losses will be earnings of $115 billion that the administration expects the Federal Reserve to realize from the extraordinary assistance it has given to provide liquidity to the financial system.
--"Bailout cost may total just $87 billion," by Martin Crutsinger, Associated Press, reprinted on msnbc.com (4.23.10)
Yes, we did trust in the character, experience and ability of Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner. Who else was there who was more dispassionate and uncompromised by prior career choices and experience? Who else had the same depth of current information, historical perspective, expertise and understandings of the financial system and issues?
No, we were not swept away with the doom and dispair being marketed by those ideologically antagonistic or just skeptical toward the programs--or those personally antagonistic to President Obama himself or, by association, Secretary Geithner or Fed Chairman Bernanke. (For an overview of cost estimates ranging to over $7 trillion a year ago--and the more realistic estimates of the administration and CBO--see my post and cites in "Real Tab for Bailout? A Lot Less Than You Think," April 18,2009.)
So yes, I am quite pleased to observe the evolving vindication of these men and their courageous work on our behalf, without whom the best choices would not have been made, and the courage to carry them out would have been lacking. (And yes, some credit goes to former President George Bush who appointed Chairman Bernanke and supported the original TARP approach, and the unlikely contribution of then Treasury Secretary and former Goldman Sacks CEO Hank Paulsen.)
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