"Before inauguration. Senator Obama voted for the budgets he would later blame on Bush, and for the TARP bailout. After just two months of TARP, the Bush administration said it was done -- crisis averted. In fact, President Bush was done after using about $270 billion of the $350 B that was authorized by Congress. But as a courtesy to the incoming president, Bush would request the second $350B from Congress if President-Elect Obama asked for it.
President-Elect Obama asked for it, and he got it."
Except that he didn't spend it. Only $431 billion was ever spent, including the original amount under Bush. Given that the net cost to the Treasury was $24 billion after all disbursements back to the government, TARP actually was in a surplus under Obama and was a net positive to the Treasury during his time in office.
Troubled Asset Relief Program - Wikipedia the free encyclopedia
Am I right in saying that TARP was a complete success? Do you attribute that brilliant success to Bush or to Obama? I know the banks paid the money back, but I am a little confused (as usual). I was under the impression that TARP was a program that bailed out the banks, so the money was not 'spent' but was loaned by the treasury at interest. If the cost was a net $24 billion, how can you call that a surplus? That would seem to be a loss of $24 billion and a net negative.
The efficacy of TARP is another discussion. My argument is that the budget passed prior to Obama being elected is not his responsibility, other than what he passed after he was sworn in. That is convention. The first trillion dollar deficit was on Bush. The next three thereafter were on Obama.
The flow of TARP funds looked like this
Bush
Spent $270 billion
Received $0
Deficit $270 billion
Obama
Spent $161 billion
Received $407 billion
Surplus $246
Total
Spent $431 billion
Received $407 billion
Deficit $24 billion.
TARP ran a deficit but under Obama, TARP ran a surplus.
What you are saying is the interest on the money Bush loaned was paid back when Obama was in office, therefore Obama gets credit for all of the interest. Is that correct?
Since Bush loaned the majority of the money, he should get credit for the majority of the interest paid back IMO.
No, that's not what I'm saying.
The interest on the loans was something like 4%, and the duration wasn't much more than a couple of years. Interest income back to the government wasn't large, something like $30 billion. So maybe $20 billion of that can be attributed to Bush. TARP still ran a surplus under Obama.
The only relevance of this, however, is to show that TARP didn't contribute to the deficit under Obama. $10 billion here or there doesn't make much of a difference when there are 12 zeros in the number.