.WASHINGTON -- The Obama administration expects to recoup all the bailout money spent on banking and insurance firms, auto companies, mortgage finance companies and struggling homeowners during and after the 2008 financial crisis -- and likely turn a profit.
By 2022, the bailouts are expected to produce a profit for taxpayers – as much as $163 billion in a best-case scenario. That’s a stark turnaround from predictions of hundreds of billions of dollars in losses in the immediate aftermath of the unprecedented interventions.
The predictions were sketched out in new Treasury data released Friday, included in a series of charts highlighting the positive impact of the response to the financial crisis by the Bush and Obama administrations.
But senior officials cautioned that those projections are based on the recovery of the economy and the housing market and would only go so far as to say a profit is likely.
The biggest factor affecting whether the programs turn a profit is the future of Fannie Mae andFreddie Mac, the housing finance giants seized by the government in 2008 on the brink of collapse.
Taxpayers have pumped a total of about $188 billion into the companies to cover losses from bad mortgages owned or backed by the firms. But Fannie and Freddie have paid about $41 billion to the government in dividends.
U.S. could make $15.1 billion profit on AIG bailout, GAO says
WASHINGTON --The U.S. government could end up pocketing $15.1 billion in profit from the bailout of insurance giant American International Group Inc., according to a new estimate by the Government Accountability Office.
The report came as the Treasury Department on Monday continued to wind down its stake in AIG, announcing that it has agreed to sell $5.8 billion worth of shares to reduce the government's ownership stake to 61%, from 70%.
The sale, which would produce about $750 million more than originally estimated, would reduce the Treasury Department’s investment in AIG to about $31 billion, with the Federal Reserve holding another $9 billion.
The remaining government stake in AIG is down significantly from the $125 billion in taxpayer money pumped into the company to keep it from collapsing in 2008.
Treasury Department officials have said they hope to recover all the bailout money given to AIG. And on Monday, the GAO reported that AIG's improved financial health has brightened the outlook on one of the most unpopular bailouts from the financial crisis.