by Patrick Appel

While admitting that there may still be rough waters ahead, Free Exchange notes that the government bailouts have earned a nice profit on paper:

The government essentially bet that markets were beset by panic, and that once fear subsided banks would find themselves in better conditions and healthy enough to earn their way out of insolvency. At this point, even AIG is telling the government it will eventually be able to repay its assistance. This doesn't mean that the government couldn't have crafted a better solution to the crisis, but it does suggest that those bemoaning the high cost of the bail-out and basing their estimates on worst case scenarios involving no repayments were way, way off base.

At least we did a much better job than Germany.

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