The cost of the TARP is going to be more expensive than originally budgeted and the taxpayer will be left holding the bag. What a surprise. The government will underestimate the costs of a lot of bailout programs, so this is just the first in a long lists of items which will eventually have to be recouped by higher taxes, probably over the next five or six years.

According to Reuters, “U.S. congressional budget analysts have raised their estimate of the net cost to taxpayers for the government’s financial rescue program to $356 billion, an increase of $167 billion from earlier estimates.”

Wait until it becomes clear that the GDP growth estimates meant to calculate the budget deficit end up being too high because of the recession. That will make the TARP miscalculation look like nickles and dimes.

Douglas A. McIntyre