This site here says that basically, the government sold back some of the assets it bought to bail-out banks during the financial crisis of '08.

I'm assuming it was basically the federal bank that financed this bail-out, which we can see essentially get filled with mortgage backed securities here.

I would think that if US Gvt did indeed get money from the bail-outs, the sheet would have been reduced to less than before?

Is this an artifact of inflation?

1 Answer 1


No, the U.S. taxpayers lost about half a trillion dollars on the bailout.

This 2019 Annual Review of Financial Economics paper, prepared by Prof. Deborah Lucas from MIT's Sloan School of Business, explains how the half a trillion dollars figure came about.

Table 2 summarizes the bailout costs using my preferred metric—a fair value basis around the time of the crisis. Those estimates total about $500 billion.

An article published by MIT Sloan summarises the paper.

Mock up of bill totalling 498 billion

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    I've read that most of these banks have paid it back. That's not the case? Can you give an example of this "creative accounting" that makes either side look favorable? My impression as an American is that this is one of the few bi-partisan issues. Everyone hates and blames the banks, not one of the parties.
    – user11643
    Commented Oct 6, 2019 at 21:07
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    Sure, gladly. As you can see, the biggest loss was in the GSE's (Fannie Mae and Freddie Mac) and not the banks (TARP en.wikipedia.org/wiki/Troubled_Asset_Relief_Program ). The following is simple (but not much of an oversimplification). Suppose you lend me $1 (when no one else would lend me money, or would want high rate of interest). I later repay $1.01. You say, proudly, look everyone, I earned a penny! ignoring two important facts: 1 to repay you the original debt, I was forced to borrow from you again, so I still owe you money 2 you could have earned more interest elsewhere. Commented Oct 6, 2019 at 21:56
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    Example: huffpost.com/entry/bank-tarp_n_1335006 Commented Oct 6, 2019 at 22:01
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    Thanks. That article clears things up. I still don't think it's a partisan issue. Even in that huffpost article, a very partisan publication that loved Obama, there's no hint of partisanship. Banks are to blame and banks owe us back.
    – user11643
    Commented Oct 6, 2019 at 23:54
  • I enthuiastically agree that it would be fair to require banks and other financial institutions to return more money than they did so far. Commented Oct 7, 2019 at 0:53

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