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April 08, 2010

TARP payback

When the $700 billion Troubled Asset Recovery Program started in the fall of 2008, it was widely thought that taxpayers would never see this money repaid. Where do we stand almost 18 months later? Is the government seeing some of this money returned?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Happily the answer is yes. ... Big banks who received the lion’s share of these funds have actually largely repaid those loans, and I should say they have repaid them with interest.

"Many other recipients are beginning to do the same. The estimate now ... is that of that $700 billion, only -- and of course only in quote -- $150 billion will not be prepaid. And I think that is a major achievement because when TARP was passed -- of course we don't have a perfect crystal ball -- many people were very, very concerned that that was the last we would see of that money. The taxpayers, that is.

"So it looks like things have turned out much, much better. And so really you have to ask yourself the question, If indeed we do lose -- we taxpayers lose $150 billion -- is that an adequate price to pay for preventing the total collapse of the financial system at the end of 2008.

"We will never know for sure, but certainly the outlook right now is much brighter."

Posted by deeshore at April 8, 2010 06:45 AM