Filed under: Capitalism, Economy, Law, Taxes | Tags: TARP Spending is Over., TARP Worked -- The Stimulus Failed., The Troubled Asset Relief Program
TARP has been a success! TARP worked! The Troubled Asset Relief Program to rescue financial institutions was executed by Treasury Secretary Henry Paulson under President George W. Bush.
Two years later, the financial system is more stable, more than $204 billion of TARP funds have been repaid. Only a quarter of the original $700 billion authorization remains outstanding. The total estimated cost of TARP has been cut by more than three-fourths, taxpayers have received $30 billion in income, and the TARP bank programs are on track to make solid returns for taxpayers.
Though management of the program continues, October 3, 2010 marked the end of the authority to make new financial commitments. We have now recovered most of the investments we made in the banks. Taxpayers will likely earn a profit on the investments the government made in banks and AIG.
TARP was extremely effective in helping to unfreeze the markets for credit and capital, bringing down the cost of borrowing and restoring confidence in the financial system. There will still be big losses in funds directed to the Auto Programs and the Housing Programs, which were not part of the original intent of TARP.
“…if there’s one thing that has unified Democrats and Republicans and everybody in between, it’s that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal.
But when I ran for President, I promised I wouldn’t just do what was popular — I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.
So I supported the last administration’s efforts to create the financial rescue program. And when we took that program over, we mad it more transparent and more accountable. And as a result, the markets are now stabilized, and we’ve recovered most of the money we spent on the banks.”
— President Obama, Jan. 27, 2010
Senator Obama voted against the TARP program when it was introduced in the Senate. It passed into law anyway. And when President Obama diverted TARP funds to the bailout of the automobile industry, it was far from more transparent and more accountable. A little spin here.
The government is planning an Initial Public Offering (IPO) to sell stock in the new Government Motors in November. The price at which stock would have to be offered to make taxpayers whole is far higher than the price of GM stock at its highest. We’re going to take a big loss on that one.
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