US Government Troubled Asset Relief Program

The Troubled Asset Relief Program otherwise called TARP, is a program by the federal government of the USA that provides for buying assets and equities from financial institutions in order to regain the dynamics of its financial sector. TARP is described as the biggest constituent part of the US government's large scale measures taken starting in 2008 and intended to gain the control over the subprime mortgage crisis and bring back the economy revival. Many people still can't understand what was the purpose of giving money to big financial institutions who already had lots of funds instead of helping financially and issuing loans to those who needed it badly. The purpose must have been to strngthen the corporations considered to form the backbone of the economy so they would act like a locomotives tugging all the rest out of crisis.

What those corporation did instead, anyway? It seems they just used the money to pay off their own obligations and debts and to derive the immediate profit. In part, the TARP was intended to stabilize the housing market, but istead there's a visible rise in foreclosure rates due to people failing to meet their loan obligations. For example, last September it rose by 17% to result 106,007 cases. Early in 2009 the Congressional Oversight Panel issued statement saying: "In particular, the Panel sees no evidence that the U.S. Treasury has used TARP funds to support the housing market by avoiding preventable foreclosures". "Although half the money has not yet been received by the banks, hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending." Now there's a good time to see whether anything changed one year later, since it is already 2010 outdoors.

Department of the Treasury * residential or commercial mortgages * securities * March 14, 2008 * Federal Reserve System * committees of the Congress * banks * debt obligations * foreclosures * loans * secondary market * balance sheets * avoid losses * value * the Treasury * default rate *