Don't start looking for a dividend check, but U.S. taxpayers are actually beginning to profit from the controversial Troubled Asset Relief Program (TARP) banking industry bailout program, according to a downright giddy about it Treasury Department.
In its May monthly Troubled Asset Relief Program (TARP) report to Congress, the Treasury announced that TARP bailout repayments to taxpayers have, for the first time, surpassed the total amount of TARP funds outstanding.
The Treasury report showed that, through the end of the May, TARP repayments had reached a total of $194 billion, which exceeded the total amount of TARP funds outstanding ($190 billion) by $4 billion.
In October 2008, Congress voted to bailout failing major U.S. banks by buying $245 billion worth of their preferred stocks - basically a loan in the form of an investment -- paid for by the taxpayers. The bank bailout helped stabilize the stock market, and now the TARP "loan" is now being paid back to taxpayers through profits made from the sales of those stocks.
For example, the Treasury Department credits the $6.18 billion in gross proceeds made from its recent sale of 1.5 billion shares of Citigroup stock for allowing total TARP repayments to exceed TARP funds still outstanding.
"TARP repayments have continued to exceed expectations, substantially reducing the projected cost of this program to taxpayers," said Assistant Secretary for Financial Stability Herb Allison in a press release. "This milestone is further evidence that TARP is achieving its intended objectives: stabilizing our financial system and laying the groundwork for economic recovery."
In addition to the $194 billion in TARP repayments, the Treasury report shows that taxpayers have received an additional $23 billion through dividends, interest, and other income generated by the TARP investments.
While no dividend checks will appear in our mailboxes, success of the TARP bank bailout will theoretically reward taxpayers with a stable economy, less government spending, new jobs, a chicken in every pot... you know the drill.
Also See:
Banks Abusing Bailout?
Bailout Abuse Leads to Layoffs
Bailout Money Not Helping Small Business?
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