Which Bailout?

I don’t know how many of us can explain what TARP is, or what is was for, but I bet we are all familiar with the 2008 Bank Bailout that was allocated 700 billion dollars.

 Well it turns out that was called TARP. Treasury Asset Relief Program. It was designed by the Treasury Department and Congress in an effort to prevent the collapse of the American economy by giving money to the banks and Wall Street. There was a dire concern that these institutions would fail without government support and if they went down then Americans would shoulder the consequences.  It was initiated as small and large banks across the country started to stumble with the weight of the mortgage crisis and with an air of genuine fear, the Treasury Department went to work and devised a program that would last two years and would hopefully save the American Public from financial ruin.  It took months of 20 hour days and seven day weeks. This proposal was forecast to fail, to cause incredible debt and lay the ground work for continued support to the financial institutions from our government. It lent money to more than 700 banks but wasn’t devised to prevent the recession, this was pushed to prevent a full blown depression. 

The two year TARP expired on Monday and it looks as if it just may have worked. According to National Public Radio it may have cost only 50 billion and after the Government collects returns on the investments made we as a country just might make some dough. Senator Judd Gregg of New Hampshire stated "This is one of the few programs in the history of this country where the taxpayers made an investment, it did what it was supposed to do — which was stabilize the financial industry — and they got their money back with interest," but the end of TARP did not receive very much new attention, a few national newspapers printed the story and then buried it inside. 

I wanted to share this story as it got me thinking about how a program that received so much negative attention at its inception could hardly garner a mention when it appears that it turned out to be a success.

Another great article about TARP and it's relationship with the media can be found here.