The Treasury Department in its latest report has mentioned that the U.S government will generate profit out of the bailing out it did for the national banks and car manufacturer’s at the time of the financial crisis.
The returns that the Treasury projected for bailouts for the banks might result in an estimated $2billion , says the report . The recovering auto industry as a result of it has added nearly 230,000 jobs .
The recession that hit nearly five years ago was the worst ever since the Great Depression and managed to wipe out wealth worth 419.2 trillion .
The treasury has said that even though the economy set back on the path of recovery and it has been getting stronger , there is still lot to be done before the damages that the great crisis left behind can be fully recovered and it will take a long of time doing the same . The high rate of unemployment that can be seen is an evident criterion to prove that the nation is still living under broader economist cost as a result of the crisis.
The majority of the returns have come primarily from the Fed Reserve’s investments and loans that it has extended to the banks . The amount stands at $179 billion.
The Treasury and the Fed had invested a whopping $182 billion to bailout the insurance giant AIG.
The Troubled Asset Relief Program or TARP , which funded nearly 700 banks during the crisis has already realized a profit of $19 billion .
The bailout which was extended to the car makers Chrysler and General Motors , also a part of the TARP, had cost around $22 billion according to the Treasury. However the cost involved in the disorderly liquidation to the businesses and individuals who rely on the auto industry was far higher . Till date , more than 30 % of the shares of General Motors are still owned by the U.S treasury.
In totality , its expected that Treasury will make 422 billion out of the bank bailouts out of the TARP while $2billion on TARP loans given to restart the credit markets , after offsetting the bailouts from the auto markets.