Where'd the $350 billion go?

Congress set aside $750 billion in its initial federal bailout program to shore up failing financial institutions.  Most people assume that money went straight into those failed bankers' pockets.  While that may be true to some small extent, here's the actual breakdown of the first $350 billion according to a Freakonomics interview with the outgoing White House Economist Keith Hennessey:

Where did the first $350 billion in TARP money go?

Two hundred and fifty billion of it has gone, and is going, to recapitalize banks, big and small, as we said it would (although in a different way).

About $65 billion went to prevent Citigroup and A.I.G. from failing in ways that our team feared would have had severe systemic financial consequences. Nineteen billion went out as loans to General Motors, Chrysler, and their finance companies. And $20 billion is budgeted for a program scheduled to be rolled out in late February to provide some liquidity to certain securitization markets, to keep money flowing for credit cards, auto loans, small business loans, and student loans. That’s $354 billion, of which about $251 billion had actually gone out the door as of Sunday January 11.

Don’t forget that each of these is a loan or an investment, structured so that the recipient is required to pay the taxpayer back. We’re taking a risk with these funds, in that the investments are uncertain and we know that some of them won’t be paid back in full (but we don’t know which ones). The point is that the long-term cost to the taxpayer will be significantly less than the initial taxpayer outlay.