Bogus Estimate of TARP losses falls to $25 billion

The CBO claims this supposedly good news:

Reporting from Washington — The projected cost of the $700-billion financial bailout fund — initially feared to be a huge hit to taxpayers — continues to drop, with the nonpartisan Congressional Budget Office estimating Monday that losses would amount to just $25 billion.

That's a sharp drop from the CBO's last estimate, in August, of a $66-billion loss for the Troubled Asset Relief Program, known as TARP. Going back to March, the budget office estimated that the program would cost taxpayers $109 billion. . . .

The cost estimates for TARP cannot be separated from the overall cost of the financial bailouts. For example, the $45 billion in reduced taxes on GM in early November must have had a real impact on how much money people were willing to pay for the new stock. That stock price in turn impacted how much money the government says that it got back on its TARP investment. Suppose that the government had reduced GM’s tax bill by $100 billion and the stock price then rose above the $44 the government had originally paid for GM stock, would you want the CBO to then claim that the government had made a profit on the TARP funds? I don’t see how one can evaluate how good of a move TARP was unless you take into account all these other financial moves taken by the government.

No does this CBO accounting actually take into account costs such as the $45 billion in tax breaks given to GM in November? No. Does it take into account other subsidies given to GM such as the cash for clunkers program or the guarantees given to pension funds? No. And those are just the additional uncounted costs borne for GM.