Friday, January 16, 2009

CBO: $64 Billion "Subsidy Cost" for TARP

by Bill McBride on 1/16/2009 02:35:00 PM

From the CBO: The Troubled Asset Relief Program: Report on Transactions Through December 31, 2008

This is the first of CBO’s statutory reports on the TARP’s transactions. Through December 31, 2008, those transactions totaled $247 billion. Valuing those assets using procedures similar to those specified in the Federal Credit Reform Act (FCRA), but adjusting for market risk as specified in the EESA, CBO estimates that the subsidy cost of those transactions (broadly speaking, the difference between what the Treasury paid for the investments or lent to the firms and the market value of those transactions) amounts to $64 billion.
CBO calls its a "subsidy cost", others call it a "loss".

CBO TARP Subsidy Click on table for larger image in new window.

Here is the CBO table of subsidies.

AIG and the auto companies are the big winners (in percent subsidy).