Bank bailout potential cost: $10,000 per American!

It’s official. Congress confirms the Treasury has been substantially overpaying banks for their junk assets:

A regulator overseeing the government’s $700 billion bailout testified Thursday that the Treasury Department paid $254 billion for $176 billion of assets — a shortfall of $76 billion.

“Treasury paid substantially more for the assets it purchased under the TARP than their then-current market value,” said Elizabeth Warren, chairwoman of the Congressional Oversight Panel examining the Troubled Asset Relief Program, or TARP.

So we’re paying banks $3 for every $2 they give us.

Forbes is talking about a possible total bailout cost to taxpayers of $9 trillion!

A federal program to guarantee or buy bad assets from the ailing U.S. bank sector could come with a $3.5 trillion price tag.

That would push the accumulated costs of rescuing the financial markets over the last year through various federal loan, stock purchase, debt guarantee and other programs close to $9 trillion and counting, with practically no end in sight for the bad news battering the banking industry.

That figure doesn’t count the $825 billion economic stimulus plan.

If we spend $9 trillion, one-third of which is a pure gift, that would be a $3 trillion gift to banks! That’s $10,000 per man, woman and child in America.

I’m expecting a darn spiffy toaster next time I open an account.

Posted by James on Thursday, February 05, 2009