We are getting a bargain on this TARP business.
"The cost of TARP is likely to be no greater than the amount spent on the program's housing initiatives," Geithner said in prepared testimony to the Congressional Oversight Panel. He said the direct financial cost of TARP was once estimated as high as $350 billion by the Congressional Budget Office but was now "likely to cost a fraction of that amount" as investments are sold off and interest and dividends collected. The latest estimate from the non-partisan CBO estimated that TARP's net cost will be as low as $25 billion. The Treasury's most recent all-in cost estimate for TARP, including expected gains from AIG investments, is about $30 billion.
Geithner said the 1 percent of GDP cost for all rescues -- including capital support to Fannie Mae and Freddie Mac. and actions taken by the Federal Reserve -- is "remarkably low" compared to other past banking crises.