Bailouts - E r ick Leonard TARP BA 150 Bailouts, billions...

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E r i c k L e o n a r d T A R P B A 1 5 0 Bailouts, billions and financial crisis are the words that activate the tool known as TARP “Troubled Asset Relief Program”. Was TARP a necessary tool used to save this country from falling into yet another depression or did they just post pone dooms day? Or do these companies deserve saving at all, should we have let them fail? In this paper I will go through what TARP was all about, what has happened since the passing, some arguments and my position on this crisis. So what was TARP all about from its very core, its plans and what they wanted to achieve? TARP is “A government program created for the establishment and management of a Treasury fund, in an attempt to curb the ongoing financial crisis of 2007-2008.” (Investopedia.com) So tarp was initiated when Stock market pretty much fell into a selling frenzy and the Credit companies cried for help as they locked up there funds. TARP was there when the world cried for help as it fell into one of its largest financial crisis’s of its time. “Congress authorized the Treasury Department to use up to $700 billion to stabilize financial markets through the program TARP” (New York Times) TARP never actually achieved the use of their 700 billion dollar budget, but actually only spent around 327 billion dollars, so a little under half. TARP is responsible for bailing out our worlds Giants such as A.I.G, hundreds of our banks and car companies like Chrysler and General Motors. TARP’s number one goal was to keep our worlds companies from failing and sending the whole world into a depression, so they had figured that would win and lose some money on this. They estimated that in the end years upon years from now tax payers would end up shelling out around 50 billion out of their pockets. The Treasury secretary, Timothy F. Geithner believes that the estimates will be lower than those initial estimates. “Those estimates are now around $25 billion,” Mr. Geithner said. “They are too Page | 1
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E r i c k L e o n a r d T A R P B A 1 5 0 high, in my judgment. Ultimately, they’ll be lower.”(The Associated Press) What has really happened since TARP passed though? Since TARPS passing many banks and businesses have stayed afloat and staying strong. “Share prices then recovered, and they rose still further as the crisis atmosphere gave way to economic recovery.” (R.A. | WASHINGTON) TARP backed all the big banks and Giants with all the Capital necessary to stay alive and kept all those banks from crashing. TARP is also starting to make money and cutting the cost of this bailout to tax payers. “As of December 2009, financial institutions repaid approximately $71 billion of the TARP funds, and Bank of America Corporation announced that it would repay an additional $45 billion. Further, $226.5 billion of the original $700 billion was never spent” (Gale Opposing Viewpoints). This year I didn’t know how I was going to pay for school without loans and I got turned down
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This note was uploaded on 03/30/2011 for the course BA 150 taught by Professor Elsberry during the Spring '08 term at N. Colorado.

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Bailouts - E r ick Leonard TARP BA 150 Bailouts, billions...

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