Five Myths About TARP

The below article from the Washington Post is by Treasury Secretary Tim Geithner and it makes many observations about the effectiveness of TARP. The program worked and the financial security of all Americans is much stronger today because of it. As of now it will cost $50 billion and saved our economy, and in the end it may break even.

The program was essential to averting a second Great Depression, stabilizing a collapsing financial system, protecting the savings of Americans and restoring the flow of credit that is the oxygen of the economy. It achieved all that at a lower cost than anyone expected. . .
“The much less severe savings and loan crisis of the late 1980s and early 1990s cost 2 1/2 times that as a share of our economy. . . The U.S. financial system has been completely overhauled and is in a much stronger position today than before the crisis. In fact, the weakest parts of the system are gone.
Of the 15 largest financial institutions before the crisis, four are no longer independent entities. Five were forced to restructure. Two are subject to much stricter federal oversight. Ten have seen major changes in senior management and boards of directors.
“We have recovered more than $200 billion in TARP funds, as well as made $28 billion in profits. Our remaining investments in banks are small. In the end, 90 percent of that once-feared $700 billion TARP price tag either will not have been spent or will be returned to the taxpayers.

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100705081.html?hpid=topnews

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