Earlier this month, the Congressional Budget Office (CBO) released its latest assessment of the cost of the TARP program. According to the CBO Director’s Blog, TARP is expected to cost taxpayers $24 billion, down from $32 billion in CBO’s March 2012 estimate.

At face value, this is middling news. On the one hand, CBO reports that $431 billion of the initial $700 billion bailout has been dispersed, which means taxpayers lost a less than five percent of the initial investment in bailing out Wall Street. (Ironically, it is TARP bailouts to the non-bank programs – specifically AIG, the auto industry, and grant programs for home foreclosure prevention – that will cost the taxpayers money. The banks themselves paid back the loans, and gave the taxpayers a small profit.)

On the other hand, only in Washington is a $24 billion loss good news. This is enough money to pay for Lebron James’ 2012 salary almost 1,400 times…

But beyond the immediate finances, the news about TARP is almost all bad. Yes, the banks were saved from utter collapse, and possibly our economy along with it. Unfortunately, as George Will pointed out in a recent column, they now have more economic power than ever:

There are 6,000 American banks, but “half of the entire banking industry’s assets” are concentrated in five institutions whose combined assets amount to almost 60 percent of the gross domestic product. And “the top 10 banks now account for 61 percent of commercial banking assets, substantially more than the 26 percent of only 20 years ago.”

Will, who quotes numerous experts throughout this column (including in the block quote above), does some more quoting in showing just how terrible this concentration of banking power is (emphasis added):

“For all its bluster, Dodd-Frank leaves TBTF [Too Big To Fail] entrenched. . . . In fact, the financial crisis increased concentration because some TBTF institutions acquired the assets of other troubled TBTF institutions. The TBTF survivors of the financial crisis look a lot like they did in 2008. They maintain corporate cultures based on the short-term incentives of fees and bonuses derived from increased oligopoly power.”

….

Capitalism — which is, as Milton Friedman tirelessly insisted, a profit and loss system — is subverted by TBTF, which socializes losses while leaving profits private. And which enhances the profits of those whose losses it socializes. TBTF is a double moral disaster: It creates moral hazard by encouraging risky behavior, and it delegitimizes capitalism by validating public cynicism about its risk-reward ratios.

This is indeed the problem with TARP. While politicians may cheer the “small” loss of $24 billion, the fact is that TARP has exacerbated the very same problems that caused the 2008 crash. To paraphrase former TARP Inspector General (and 2008 Obama donor) Neil Barofsky in his new book Bailout, Too Big To Fail is now essentially official policy of the federal government of the United States. And that is not a good thing for America.