Howard Rich

As the infamous Troubled Asset Relief Program (TARP) winds down this week, Republicans and Democrats in Washington, D.C. are patting themselves on the back for a job well done. Not only are they claiming to have saved the nation from a “Second Great Depression,” this so-called economic miracle was apparently purchased at a bargain basement price.

According to the Congressional Budget Office, TARP will cost taxpayers “only” $66 billion. The White House puts the figure even lower – at $50 billion. Of course these rosy, election-year estimates are based on government liquidating its ownership stake in hundreds of “private” corporations – including a 92 percent stake in the American International Group (AIG) and a 61 percent stake in General Motors (GM).

For taxpayers to recoup their “investment” in AIG, the government will have to sell 1.66 billion shares of common stock at an average price of $29 per share. At GM, the government must sell 304 million shares of common stock at an average price of nearly $134 per share. Hitting these targets would be a daunting task in any economic climate – and may prove insurmountable in our ongoing malaise.

“How does one get $49 billion out of a company that’s currently worth $25 billion?” an investment research publication recently asked. “The follow on question is: why would investors buy AIG shares while the government’s AIG stock sale could last 18-24 months?”

Short answer? They wouldn’t – and likely won’t.

Meanwhile GM has dramatically scaled back its initial public offering in recent weeks – a sign that the company will be forced to continue operating under the “Government Motors” banner for the foreseeable future.

But this debate isn’t about getting an accurate accounting of the final TARP tab and assessing its risk versus reward – it’s about honestly assessing the problems that come with government picking winners and losers in the marketplace in the first place. Even if government’s taxpayer-funded investments yielded better than average returns (or huge cash windfalls), that doesn’t make them right – nor does it mean taxpayers will ever see one red cent of their money back.

And while TARP has enabled union bosses in Detroit and AIG executives all over the world to make out like bandits (as bureaucrats across the country did in the wake of the “stimulus”), what about the people who were forced to pick up the tab? What about the 15 million Americans who are currently unemployed? Or the millions of American households that have seen their income levels decline in each of the last two years? What about the small business owners whose taxes are about to skyrocket as government begins making interest payments on its massive new debt?

Howard Rich

Howard Rich is the Chairman of Americans for Limited Government.