Way back at the beginning of this blog site and this blog in late 2008 I noted that the TARP program introduced by President Bush and implemented by his Secretary of the Treasury Hank Paulson would be an unexpected bonanza.   I predicted that through the TARP the Feds would make a bundle by borrowing at 1% and lending to banks at 6%.  The Feds were also buying shares in the banks with the same cheap borrowing.  President Obama then used the TARP to buy shares in our auto industry with cheap borrowing.  I argued that the Feds should continue the same program and use it to buy up large shares of the US “means of production.”   I joked that what the Russians tried to achieve by blood the US was doing through its unlimited power to borrow.

I now read a report that five years later the US has made $32 billion from its lending to the banks and purchase of bank shares.   It has lost $16 billion on its shares of the auto industry because the Feds did not want to hold the shares longer.  So the net gain was $16 billion.  Not a bad return, and this was  a bonus, since the real reason for the TARP was to stabilize the financial industry and later revive our auto industry, which it also did in spectacular fashion.

Seldom has a Federal program been so successful.  I only wish the Feds had used their cheap credit to buy up even more of  US industry, since it may have been able to cover deficit spending with profits.