U.S. Treasury lied about TARP loss: Calls $45 bil. AIG loss $5 bil.

I’ve been reading everywhere, including BusinessWeek, about how TARP didn’t really cost Americans anything.

Well, now that the propaganda has spread far and wide, it turns out the U.S. Treasury lied:

The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.

β€œIn our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.

In early October, the Treasury issued a report predicting that the taxpayers would ultimately lose just $5 billion on their investment in A.I.G., a remarkable outcome, since the insurance company was extended $182 billion in taxpayer money in the early months of its rescue. The prediction of a modest loss, widely reported as A.I.G., the Federal Reserve and the Treasury rushed to complete an exit plan, contrasted with an earlier prediction by the Treasury that the taxpayers would lose $45 billion.

Posted by James on Tuesday, October 26, 2010