I’ve described the Geithner’s repeated claim that the TARP made money as three card monte, since looking at the TARP in isolation from the hidden tax on savers of ZIRP and QE was misleading. ZIRP alone is estimated to have cost US savers over $300 billion a year, more than 10x in a single year of the total “profit” attributed to TARP.
TARP did make money. That is just simple fact. Despite Bush and Paulson handing out $350billion to Wall Street, Geithner and Obama got it back. Smith's argument is that profits on TARP were negated by "losses" from "ZIRP" and "QE" that kept interest rates low. Fascinating book-keeping: you just subtract "estimated" (i.e. just pulled out of the air ) costs to "savers" from actual earnings to US Treasury and - voila, you announce that there were no profits. What would have happened to all the people with variable rate mortgages if interest rates were not low? Instead of tens of billions of dollars of mortgage refinances, we would have had millions of more homeless. Oh. Tough shit for them, I guess.