Sure, Washington used taxpayer money to prop up the banks that played a crucial role in wrecking the economy. But at least the government turned a profit on the bailout, right? Not exactly.
According to a Government Accountability Office report, banks have been paying for the bailout loans with cash meant for lending to small businesses. —ARK
The Huffington Post:
All told, including dividend, interest and other payments, U.S. banks have repaid the government $211.5 billion under the Capital Purchase Program (CPP), the first phase of the government’s Troubled Asset Relief Program (TARP), according to a report Thursday by the Government Accountability Office, a congressional watchdog. That’s more than the $204.9 billion the banks initially got under TARP.
$211.5 billion minus $204.9 billion equals profit, right?
But 48 percent of the banks that have repaid the CPP used money they’d gotten from other federal programs, according to the GAO report. Those programs include the Community Development Capital Initiative—another TARP program—and the Small Business Lending Fund, a program designed to encourage lending to small businesses. Both of those programs have more favorable borrowing terms for the banks than the original CPP. Read More