Tuesday, October 5, 2010

Goodbye bailout: TARP runs out Oct. third

On Oct. 3, the controversial Troubled Asset Relief Program (Troubled Asset Relief Program ) comes to an end, after being more successful and costing less than expected . Nevertheless, the unprecedented nature of Troubled Asset Relief Program alarmed opponents of so-called big government and turned “bailout” into a Republican code word intended to demonize the administration’s fiscal policies . The fact that TARP saved Wall Street, automakers and insurance giants, yet failed to perceptibly help ordinary Americans has Democrats on the defensive over a policy enacted by the previous Republican administration.

Exactly what Troubled Asset Relief Program will cost

TARP will stop extending loans Sunday, but it will continue to collect dividends and repayments. The Treasury Department was given $700 billion by congress to stop the economy collapsing about two years ago, reports Fortune at CNN. TARP’s bill is less than anybody thought it would be while Wall Street is working on getting back into shape and the economy is working at healing. The Treasury says that only $386 billion of the fund was really given from the government. Now the cash is slowly going back to the government. The rates are higher than expected too. This week Treasury secretary Tim Geithner said he expected the total cost of TARP to come in under $50 billion.

Bad reaction due to Troubled Asset Relief Program

Although TARP has penciled out on paper, the Washington Post reports the money spent is merely a fraction of what the government allotted to conserve the financial system. More than $1.5 trillion was distributed by the Treasury and Federal Reserve to help the mortgage and housing market. The federal government has become part of the private sector now with all the bailouts. A socialist takeover is what extremists think will happen soon as a result of the economic help being done. Such rhetoric has fed deep resentment of government and an anti-incumbent environment in which any politician who voted for TARP faces a toxic backlash within the November elections.

The garbled issues of Troubled Asset Relief Program

The Bush administration started a program however has left Democrats fighting for TARP to make it look sound. ABC News explains that Republicans are excited that TARP isn’t something the country likes. That means that those linked to the term bailout, Obama and Democrats, aren’t liked due to the awful connotation. For example, at an press conference Aug. 10, House Republicans used the word at least seven times while badmouthing a $26 billion state fiscal aid package moving via Congress. Despite the fact that the program is already expired, the “Pledge to America” from Republicans says the program could be ended permanently.

Articles cited

CNN

finance.fortune.cnn.com/2010/10/01/tarp-ends-thrifty-but-unloved/

PMS Money Blog

personalmoneystore.com/moneyblog/2010/07/15/banks-and-bailouts/

Washington Post

washingtonpost.com/wp-dyn/content/article/2010/09/30/AR2010093006621.html

ABC News

abcnews.go.com/Politics/tarp-government-bailout-ends-sunday-started-bush-gop/story?id=11765955



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