“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.
A Treasury spokesman referred The Huffington Post to past statements by Barofsky in which he said a full accounting of the government’s profit would have to include both Fed and Treasury investments in AIG.
Current Special Inspector General for the Troubled Asset Relief Program Christy Romero did not immediately take issue with the government’s numbers, though her office has questioned the Treasury’s bailout-profit claims in the past. A spokesman for her office said she would make a full accounting after the stock sales….”Comments »