The tremendous moral hazard generated by risk-proofing the FIRE industry's bad practices w/r/t fraud-laden risk measures, CDOs, and CDSs caused orders of magnitude greater losses to ordinary Americans than the one time $15.3B windfall to the treasury. Better that the govt had cut $40K checks to every taxpayer than saved the banks' shareholders.

You're not wrong, but all of that is a moral or unquantifiable point.

And it doesn't change the fact that TARP didn't cost any real money.

Why is TARP the only program we judge with ROI?

Investment into NASA or infrastructure or education also has a return on investment, but anytime TARP is mentioned in comparison someone will bring up its ROI.

I know the answer is that the ROI for TARP is so much easier to quantify, but I still want to make the distinction that it's not unique for a government program.

> Why is TARP the only program we judge with ROI?

Seriously. The ROI of solving the homeless and mental health crisis to the point where most of them can get back to work and become tax paying citizens is probably pretty good too.

There's not a lot of evidence that homelessness and mental health welfare will generate net positive tax revenue. Ever met someone on anti-psychotics? They go through the rest of their life barely able to grasp new concepts with a drug specifically designed to mute that part of their brain, alongside the side effects on their relatively short-lived organs being poisoned by the same drug cocktail.

> Ever met someone on anti-psychotics?

Yes, I meet very many people who take a variety of anti-psychotic meds.

> They go through the rest of their life barely able to grasp new concepts with a drug specifically designed to mute that part of their brain,

This describes a few of them, but not most of them.

Those needing anti-psychotics are a small subset of the population I mentioned.

I guess when you pump 4 trillion dollars and a federal guarantee of "we wont let these assets fail" into "toxic assets" then they become worth something.

> TARP didn't cost anything

This assumes zero value of having the Treasury backstop a business. There is always a cost associated with making an investment (which TARP was). In a sense, the entire discipline of pricing risk is based on calculating this cost.

Whether or not the chosen risk eventually paid off is a different question than the whether the risk had a cost to begin with.

* - I was a proponent of TARP as one of the better risks on the table.

and perhaps a loss when adjusted for inflation... I've seen some spectacularly detailed comments on this from other hn users, specifically in regards to the inequity of QE. If anyone more knowledgeable could comment, I would appreciate it.

They made back money, but less than they would have if they had just parked it in regular bonds. It's not an absolute loss of moneyt--it's a loss relative to what they would have done if they hadn't invested in TARP.

If TARP was such a great deal why did the government have to do it? Why didn't private investors jump in and support the banks?

If highways are such a great deal, why does the government have to fund them?

If national defense is such a great deal, why does the government have to fund it?

If FDIC insurance is such a great deal, why does the government have to fund it?

Why does the government have to do anything? Why don't private investors jump in and do everything?

The answer is: because there are certain things that are only a great deal if they are done by everyone all at once. Left to individual players, sometimes the incentives align like running from a bear--I don't have to outrun the bear, I just have to outrun one other person.

This is why we have government at all. Humanity was not handed a government, we invented it to solve problems that could not solved by piecemeal individual action.

And for TARP, a reminder that it came after Lehman failed and money markets broke the buck. The first House vote on TARP failed. It was adopted at the last minute, only as it became clear that it was necessary.

I accept that national defense is not a profit center, neither are highways. But they are good for everybody so it's ok that the taxpayer pays for them. The same may be true for TARP but I don't like to hear that TARP made profit because it didn't. Since 2008 we had huge deficits, banks got a backstop for free, the fed had to take on a lot of assets it normally should't have to, interest rates are very low. These all have a price.

TARP was not a benign thing but instead we should make sure this never happens again.

Highways are absolutely a profit center. The Fed spends ~$50 billion/year on highways and gets ~20% of the entire productivity of the nation in return. ($4 trillion on $20 trillion GDP)

If the entire highway system increases GDP at least $250 billion (1.25% of GDP) then highways are profitable.

There do exist a lot of private roads. If govt did not build them for free, there would obviously be a lot more of them.

But the government didn’t build them for free. We collectively paid to build them, and now they more than pay for themselves. Roads are arguably the greatest investment the American taxpayer has ever made.

Building pubic-use roads without government planning, permitting, and eminent domain is frankly not going to scale, aside from the nightmare of how all the different owners of these roads would go about rent-seeking.

"National defense" is such a poor example that it throws everything you've said into doubt. It is not a great deal to spend more than every other nation on earth combined, just to murder lots of people in other parts of the world. Those murders are of negative value to decent Americans.

I'm talking about government spending on national defense in general, not the current U.S. budget specifically.

The rest of us are talking about USA spending during the time that NASA has existed.