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Capitol Report: A tale of two bailouts: Cheese vs. TARP

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There’s too much cheese out there.

On Tuesday, the Agriculture Department announced a $20 million bailout for cheese producers ravaged by a swoon in prices.

The cheese surplus is at a 30-year high, the government said, and dairy producers have seen a 35% drop in revenue over the past two years.

Here’s a side-by-side comparison from a more well-known bailout, that of the U.S. financial system. (We’re only using the Troubled Asset Relief Program here, though the financial system’s rescue could also be said to include the Federal Reserve’s emergency lending programs.)

Bailout Cheese TARP
Why Good weather, increased global production led to glut of supply Loose regulation, easy lending led to glut of housing finance
Cost Announced size of $20 million Announced size of $700 billion
Warehousing State-of-the-art cold-storage warehouses Flimsy bank balance sheets
Best precrisis product Mozzarella sticks Helocs
Worst precrisis product Cheese whiz No-doc loans
Destination for government purchases Food banks U.S.

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