Tuesday, December 11, 2012

"Huge AIG Bailout Profit 'Misleading', Says Ex-TARP Watchdog"

From Mark Gongloff at the Huffington Post:
Merry Christmas, America, the U.S. government is about to close the books on its AIG bailout with a big profit. Please just ignore the immeasurable costs.

The Department of the Treasury said on Tuesday that it planned to sell its remaining 16 percent stake in American International Group for $7.6 billion, which by the department's count means taxpayers will turn a $22.7 billion profit on the $182 billion bailout.

The Treasury often tries to put the best spin possible on its bailout costs. And as night follows day, bailout watchdogs often disagree with the Treasury. Sure enough, Neil Barofsky, the former special inspector general of the government's bailout program for AIG, banks and automakers, known as the Troubled Asset Relief Program, warned that the department's AIG final profit tally relies on fancy accounting.

In an email to The Huffington Post, Barofsky called the government's profit estimate "misleading" because nearly a third of the AIG stock that the Treasury is selling came from the Federal Reserve, not from the Treasury's bailout program. What's more, Barofsky says, the taxpayer stands to lose money from a waiver it gave to AIG on billions in future tax payments.

But other than that, Barofsky conceded, the AIG bailout was not a disaster for the taxpayer profit-and-loss-wise....MORE 
And from the 'Questions no one is asking' file:
Does The US Treasury Owe Capital Gains Taxes On AIG Profits?