We've been watching the slow-motion payback of TARP funds for some time now, and finally, last week, some of the TARP money was repaid to the U.S. Treasury in significant amounts. Goldman Sachs, Morgan Stanley, Bank of New York, and six other instituions have now paid back a total of more than $66 billion.
The landscape looks so much brighter on this front that the Congressonal Budget Office now estimates that cost of the TARP program, after the banks are done paying back what they got from the Treasury, will amount to $159 billion. That's still an awful lot of money, but it doesn't look so bad considering that the initial TARP program involved a payout of $700 billion, and as recently as March, the CBO estimated that the program would result in an overall cost of $356 billion to the American taxpayer.
And a big chunk of the money that the CBO figures is lost for good is the money that didn't go to banks. The TARP program gave $55 billion to the American car industry, and the CBO expects the government to recoup only $15 billion of that. So all in all, this is good news for the banking sector, and good news for the American economy.
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