The Troubled Asset Relief Program (TARP), created and enacted by President George W. Bush’s administration in 2008 with strong support from Republicans, has been deemed a success for taxpayers by President Obama’s administration on the date of its so-called ending, despite being criticized by opponents both liberal and conservative. Only $386 billion of the original $700 billion authorized by the TARP was distributed to help the economy. The second $750 billion authorized was never touched.
The money that has been repaid by bailed-out companies has been profitable for taxpayers thus far, but most organizations are predicting an overall loss of $30 billion, though some opinions put that figure around $90 billion. Even though the program has become wildly unpopular and is seen as a symbol of Democrat overspending, economists agree that enacting the TARP was a better option than the alternative — not doing anything to prop up AIG and GM. We’ve experienced an national jobless rate of over 10%, and some people are mad as hell, but with a collapse of the financial and automotive industries, that number could have been 15% or 20%.
Not every program within the TARP has been as successful, however. The Home Affordable Modification Program (HAMP) has not attracted lenders to participate. There has been money available to help homeowners who, whether because of unemployment, overextension or shady lending practices, can’t afford their mortgages. Without lenders agreeing to participate, the money destined for “Main Street” rather than “Wall Street” never made it into anyone’s hands.
History may look upon the TARP as a failed economic program, but that will be a result of politics, not economics. Public perception becomes reality.
Updated October 10, 2010 and originally published October 6, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.