ONLY THE IDEOLOGUES ARE SURPRISED:

Surprise! The big bad bailout is paying off: The U.S. government's often maligned $14 trillion intervention not only staved off global collapse - but is making money. (Allan Sloan, July 8, 2011, Fortune)

The bailout of the financial system is roughly as popular as Wall Street bonuses, the federal budget deficit, or LeBron James in a Cleveland sports bar. You hear over and over that the bailout was a disaster, it cost taxpayers a fortune, we didn't really need it, it didn't work, it was a failure. It has become politically toxic, which inhibits reasoned public discussion about it.

But you know what? The bailout, by the numbers, clearly did work. Not only did it forestall a worldwide financial meltdown, but a Fortune analysis shows that U.S. taxpayers are coming out ahead on it -- by at least $40 billion, and possibly by as much as $100 billion eventually. This is our count for the entire bailout, not just the 3% represented by the massively unpopular Troubled Asset Relief Program. Yes, that's right -- TARP is only about 3% of the bailout, even though it gets about 97% of the attention.

A key reason for the rescue's profitability is that the Federal Reserve System has already turned over more than $100 billion of bailout-related income to the Treasury, and is on track to turn over $85 billion more this year and next. That's not something most people include in their math.

The Left assumed capitalism had failed so catastrophically it couldn't be saved and the Right assumed that government action could never be effective. Both were just trapped within their own ideologies. Thankfully, W was president when it mattered and the UR supported him, even though immediate passage of TARP could have cost him the election.

Posted by oj at July 8, 2011 6:29 AM
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