Forget the rhetoric, bailout has turned out to be a good thing for taxpayers

This is why you can't jump to conclusions about the way the government spends money. Fortune's Allan Sloan led a team of reporters that looked at all the handouts related to the financial meltdown and discovered that U.S. taxpayers are actually coming out ahead by at least $40 billion, and possibly by as much as $100 billion. It gets a little complicated, but in a nutshell:

1)TARP, the hugely unpopular Troubled Asset Relief Program, is costing way less than first envisioned - about $19 billion. That's still quite a bit of money, but it's pocket change compared with the original cost estimates that ran into the hundreds of billions of dollars.

2)Uncle Sam bought assets at near-bottom prices, and the value of those holdings has since soared. Much of this comes from income on the $1.25 trillion worth of mortgage-backed securities that the Fed bought in 2008-09 to stabilize credit markets (otherwise known as Quantitative Easing 1). From the Fortune piece:

The Fed now owns almost $2 trillion more of securities than it did before financial problems surfaced in 2007. A normal financial institution would have had to borrow heavily to add $2 trillion of assets, and interest on that borrowed money would have offset most or all of the income from the added assets. The Fed, though, doesn't have to borrow: It effectively creates money (which has its own problems) to buy the securities. So the Fed's income on its added securities is pure profit.

Each year the Fed turns over most of its annual profit to the Treasury. It's money that the Treasury can spend, and it reduces the federal budget deficit. From 2007 (when the Fed began expanding its balance sheet to combat financial instability) through 2010, the Fed sent a total of $193 billion to the Treasury. In the previous four years it sent the Treasury only $91 billion. We're counting that $102 billion difference as bailout-related profit.

It's not all positive. The biggest expense is the $130 billion used to prop up mortgage finance giants Fannie Mae and Freddie Mac. There's also $35 billion worth of tax breaks that were given to AIG, Citigroup, General Motors, and Ally Financial. Of course, that tax help presumably increased the share prices of those companies. Anyway, put together all elements of the federal bailout and taxpayers wind up ahead. Not that Obama can really use these numbers in his campaign - not with a slow-growth recovery and a 9.2 percent jobless rate. Besides, the "It could have been worse" mantra is a political non-starter. That and two bucks will get you a cup of coffee at Starbucks. Nonetheless, the Fortune piece is worth holding onto just in case you get cornered by some jerk who claims that Obama made the economy much worse. He hasn't - not by a long shot.