Citigroup (C Quote) and Bank of America (BAC Quote) are going to take time before they can become good investments for  the U.S. government. Paper losses run $3 billion and $2.2 billion respectively, based on the original strike price for the preferred shares bought by the U.S. Treasury and yesterday’s closing price for the common shares. 

All told, the government is currently facing $8 billion in losses on the 10 biggest investments it made – and that’s after accounting for the $424.1 million paper gain on Morgan Stanley (MS Quote) shares and the $271.6 million paper profit on Goldman Sachs (GS Quote) shares. 

For those keeping score, the Treasury owns almost $200 billion in preferred stock from 532 firms, but 8 firms account for $134 billion. In all, the bailout is now more than $3 trillion, which is just about as much as the entire federal budget for last year. Morgan Stanley and Goldman Sachs are the only 2 out of the 10 biggest government investments that are in the money. Aside from those two bright spots, the only other good news for taxpayers is that the government collected $2.5 billion in dividends from its banking investments through March 31. 

So my recommendation to Treasury Secretary Tim Geithner is to take the money and run if any banks are ready to buy back the preferred shares and repay the bailout money they took. If taxpayers have to wait for the shares of these banks to top the strike price, we may be stuck with these investments for a very long time.