Although it has angered millions of Americans and cost some of its supporters their elected offices, it appears that the $700 billion Troubled Asset Relief Program (TARP) has been largely successful and not nearly as costly as feared.
The news came out last week that the government has negotiated with American International Group to begin paying taxpayers the $70 billion in relief it got. Treasury secretary Timothy Geithner estimates that the bank rescue program will wind up costing the government $50 billion at the most, and there’s a possibility that there will be no loss at all. The program expired last Sunday, which means the Treasury Department can no longer allocate any of its money or redirect repaid funds.
TARP is widely damned. Less than 30 percent of Americans believed it was necessary to save the financial system. Most folks see it as $700 billion in corporate welfare handed to the folks who helped create the economic collapse.
The $700 billion was never fully deployed. The government distributed $387 billion to banks, AIG and the automotive industry and in an (unsuccessful) attempt to help people avoid foreclosures. At one point in 2009, there was concern that the program would require another $750 billion, but that has proven not to be necessary.
Proposed by the Bush Administration and passed with bipartisan support, TARP was hugely controversial. Supporting the move, which appears to have prevented a much larger crisis, cost some Republicans re-election and helped give rise to the Tea Party movement. The anger against the government “bailout” of the financial industry persists in spite of TARP’s success, and we can only speculate what the economy would look like today had it not been in place.