The government has come up with a ridiculous way of spinning TARP
Since TARP could end up losing $260 billion less than expected, the Obama administration says it could use these unspent TARP funds to offset other spending, reducing the U.S. government’s expected deficit.
Of course, all money is fungible, so unless we see an actual reduction in spending, this is just accounting gimmickry.
WSJ: Agreeing not to spend a certain amount of TARP money will enable the White House, in its budget projections, to assume less money out the door and, therefore, less debt issued. The move would also reduce the deficit by an unknown amount since a certain level of spending and borrowing is already factored into estimated future deficits.
The Treasury Department said about $210 billion in TARP funds remains unspent, including about $70 billion returned from financial institutions. A further $50 billion is expected to be repaid in the next 12 to 18 months.