subject: Troubled Asset Relief Program-Good News for the Taxpayer [print this page] Troubled Asset Relief Program-Good News for the Taxpayer
Troubled Asset Relief Program Good News for the Taxpayer
Continuing to help banks recover from the economic struggles facing many institutions, the programs enacted by the United States Department of the Treasury continue to make headway. The Troubled Asset Relief Program has proven to be successful in realizing profits for the organizations that are receiving the benefits of the program. The governmental office recently made efforts to repurchase the capital investments that were held by six different financial institutions. These investment packages in turn provided support directly to the underlying finances of the banks. These efforts have realized near profitability for the organizations as the recovery from the economic crisis continues to strengthen.
Through funding that was originally provided by taxpayers in the United States, the Troubled Asset Relief Program has realized over 99% of the initial investments returned. A combination of income repayments that included the distribution of dividends and interest earned on the funds have been recovered from these investments in the banking institutions. This equates to USD244bn of the dollars that were originally set aside for the TARP program. As earnings continued to be realized, the United States Department of the Treasury expects that the various programs within the act will realize a total of USD20bn in lifetime profits for the U.S. taxpayers.
The good news for taxpayers in the United States is the expectation by the Treasury Department that the entire program will have little to no total costs. The Troubled Asset Relief Program, or TARP, was initiated to provide financial support for the banks, domestic auto industry and AIG that were greatly affected by the financial meltdown. Recent accounting shows that the total costs associated with the implementation of TARP will only use those funds already allocated for the foreclosure prevention program. These monies that have been distributed by the Treasury are not expected to be recovered from these investments.
The recent budget that was released for the fiscal year of 2012 by the U.S. President shows that the expected total costs of the Troubled Asset Relief Program will be in the range of USD48bn. This estimation by the government includes the complete lifetime of the TARP implementation. This figure does not account for the amount associated with the AIG common stock that is being held by the Treasury. This investment option was not included within the program. Adding in these additional funds shows that the total projected cost for the program drops to a total of USD28bn.
Oscar E. Diaz.
About the Author: Oscar Diaz is a Venezuelan lawyer with 22+ years of experience in Corporate, International and Tax Law. He is licensed and admitted to practice law in Venezuela only. This article constitutes an opinion, and is not legal advice in any way. If you need legal advice, you should contact a lawyer licensed in your state and/or country. Oscar Diaz is not selling, promoting and/or marketing any legal service. This article is for informational purposes only.
