What happened to the 2008 bailout money?
In 2008, Congress authorized a $700b bailout of the finance sector, with almost no strings attached (notably, the bailout did not require banks that were receiving public subsidies to abstain from foreclosures or penalties for the members of the public who had just bailed the banks out).
Eleven years later, Propublica -- which started publication shortly before the bailouts happened -- is still tracking every dime of that money. Much of it was repaid -- with interest, even -- but large swathes of it disappeared forever, having enriched reckless bankers without saving their depositors.
Propublica's interactive bailout tracker lets you enter the name of a company or bank to find out how much it got and what's happened since.
But for a snapshot, Propublica's annual report on the state of the bailout is a great look at what's become of that $0.8t public spending program.
Six banks, in particular, stand out as bad credit risks who have lagged the pack in making good on their public debts, led by Oneunited Bank, which was specifically bailed out at the insistence of Barney Frank, whose $12m bailout has ballooned to $20.7m in debts thanks to missed dividend payments.
The most active part of the TARP these days is its foreclosure prevention programs. We spent a lot of time reporting on the Obama administration’s all-carrot-and-no-stick approach to getting banks to help homeowners. Foreclosures peaked in 2009 and 2010, but the government spent almost all its money long after that. Like a firefighter who’s late to the fire but wants to try out the hose anyway, the Treasury has been spraying billions for years on the smoldering ruins of the crisis.
The Treasury extended the program into 2016, and because it will pay subsidies to banks, mortgage investors and borrowers for five more years, payments will continue into 2021.
Even with all that added time, the totals won’t come close to the sorts of numbers Obama officials announced when the program was launched. In 2009, they said $50 billion was available. Ten years later, the program has finally spent its 20 billionth dollar.
The Bailout Was 11 Years Ago. We’re Still Tracking Every Penny. [Paul Kiel/Propublica]
Bailout Tracker [Propublica]