Washington - When Congress passed the $700 billion Wall Street bailout package last fall, critics said it'd be a money loser. But when 10 banks returned $68 billion of the money on Tuesday, President Barack Obama said the government had realized a small profit.

    Did it really?

    In addition to returning the $68 billion, the 10 banks paid the government $1.8 billion in dividends on the preferred shares of stock the government owned. That translates to an annualized rate of return of about 4.64 percent on the $68 billion.

    In all, the government has received $4.5 billion from all bailout recipients, who've received $200 billion, for an annualized rate of return since Nov. 12, 2008, when the money was lent out, of 3.94 percent.

    But the government had to borrow to pay for the bailout and pay interest on those borrowings. Once the interest costs are factored in, how'd the government do?

    Not bad. The annualized rate of return of 4.64 percent on the $68 billion is well above the 2 percent interest the government was paying Monday to investors who were purchasing three-year bonds. The profit margin is even higher when measured against the interest the government is paying on a six-month bond - 0.31 percent.

    The profit gets much smaller, however, if you measure it against the interest costs on Treasury notes that mature in seven years. The interest rate on a seven-year Treasury bond stood at 3.6 percent on Monday, and 3 percent last Nov. 12. Still, whichever date you choose, the government has turned a small profit. And the money repaid ostensibly goes to knocking down the overall U.S. government debt, which also lessens the government's interest burden.

    The government stands to earn even more when it sells the stock warrants it holds in conjunction with its preferred shares in the 10 bank-holding companies that are paying their bailout. Treasury and the banks are negotiating a fair-market value for these warrants.

    Mark Zandi, chief economist of Moody's Economy.com, thinks that the warrants issued against preferred shares of stock from all bailout recipients - not just the 10 authorized Tuesday to repay the government - are worth at least $5 billion. So for a snapshot in this point in time, the Wall Street bailout has been profitable.

    And that's before weighing the intangible question of what the costs of doing nothing might have been and the financial system had collapsed.