Back in July of last year I wrote a post on “The Truth of TARP” because of the misinformation I was hearing from the radical right. One example is the assertion that TARP was an Obama program, when in fact, it was the work of Hank Paulson and Ben Bernanke, Treasury Secretary of Bush and the Fed Chairman, at the end of the Bush Administration when they feared the economy would collapse. The radical right loves to point out that Dems voted for the TARP program, which is absolutely true; Republicans were happy to allow the economy to collapse and Dems stepped-up to the plate to save the country from a great depression.
The Treasury Department has an excellent article entitled, “What you haven’t heard about TARP”. Now that the GOP is back to blaming Dems for bailouts, its important that we counter the myths with facts (highlights were done by the Treasury):
Looking back, it’s clear that TARP has played a critical role in stabilizing the financial system during a period of historic crisis and has helped put our country on the path to economic recovery – at a fraction of that initiative’s original projected cost. With all the myths you’ve likely heard about TARP, though, sometimes the truth gets lost in the shuffle. But here are the facts:
- TARP broke the back of a growing panic, recapitalized the financial system, restarted the credit markets, and lowered borrowing costs for businesses and families. That made the recovery possible. Independent experts agree that TARP, along with the government’s other responses to the financial crisis, saved nearly 8.5 million American jobs, helping to prevent the recession from turning into another Great Depression
- TARP provided crucial assistance to small businesses, community banks, American automakers, and struggling homeowners.
- TARP did all this at a cost dramatically lower than first expected. Treasury currently forecasts that TARP will cost approximately $70 billion – just one-tenth of the $700 billion originally authorized.
- American taxpayers have already recovered more than 77 percent ($318 billion) of the TARP funds disbursed to date ($413 billion), and we have proposed to ensure they are repaid in full by enacting a Financial Crisis Responsibility Fee.
- TARP’s bank programs have turned a more than $10 billion profit for taxpayers.
- No More TARPs. The Obama Administration worked tirelessly with Congress to enact the Dodd-Frank Act Wall Street Reform and Consumer Protection Act, which ends taxpayer-funded bailouts.