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Most often referred to simply as 'TARP', the Troubled Asset Relief Program is a massive bailout program put in place by the United States government to purchase troubled assets -- in practice, this mostly meant buying toxic mortgages, buying stock in troubled companies, and providing and insuring loans. While these funds went to many various companies and programs, the most well-known effect was to bail out the banking system, along with two large car manufacturers.

October 3, 2008

President George W. Bush, faced with the subprime mortgage crisis, passed the original TARP bill, authorizing the United States Treasury to purchase $700 billion worth of assets from financial institutions in order to strengthen the financial sector.

This money was most famously spent on bailing out large American corporations such as Bank of New York Mellon, American Express, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, American International Group (AIG), JPMorgan Chase, Capital One Financial, Morgan Stanley, GMAC Financial Services (now called Ally Financial), Regions Financial Corporation, PNC Financial Services Group, U.S. Bancorp, State Street Corporation, Discover Financial, and of course, General Motors and Chrysler. This cost the the Treasury just over $414 billion, of which approximately $318 billion has been paid back. Many companies have worked to pay of their share early, and the US government has turned a profit on many of these loans.

July 21, 2010

President Barack Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act into law. This bill was primarily focused on financial regulatory reform, but as part of this it reduced the total funds that could be given out to $475 billion, and furthermore limited lending to programs that had already been funded under TARP. This essentially put an end to TARP, although there are another $15 billion in funds committed to various programs (the Public-Private Investment Program and the Term Asset-Backed Securities Loan Facility). Barring another financial meltdown, we can assume that TARP is on its way out.

It is currently estimated by the Congressional Budget Office that the final cost to the Federal government, after all loans are repaid and all assets sold off, will be about $34 billion.

This is a great site to learn more and keep updated on stimulus progress. The Treasury also has a TARP tracker for up to the moment information.

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