The Troubled Asset Relief Program (TARP) was initially forecast by many of its opponents to cost hundreds of billions of dollars.
It’s one of the most hated government initiatives in America right now, mainly because its underlying motive to prevent a complete collapse of the U.S. financial system has been obscured by political rhetoric which emphasises how it ‘bailed out the banks.’ Meanwhile, opponents quietly omit the facts that A) the program begun under the Bush administration and B) that it was meant to bail out the American people by saving the financial system, since most non-financial businesses, especially smaller ones, rely on the financial system just to meet their short-term operational needs. A lower availability of financing = fewer companies = fewer jobs.
Now the cost of the program has plummeted. The latest estimate from the administration is that it could cost just $50 billion, or less.
Yet Forbes still has an article telling us that TARP wasn’t worth it — without even mentioning what the actual cost of TARP has turned out to be.
Meanwhile, America has spent $1.089 trillion fighting wars in Iraq and Afghanistan since 2001 according to the Costofwar.com. Over the many years we’ve ‘bailed out’ a lot of local bad guys in these nations, in the belief that it was the lesser evil we had to choose.
Money has been siphoned off into corrupt local governments, government contractors, or military aid for shady friends-of-the-moment. In fact, America has spent the equivalent of a $50 billion TARP every five months over the last decade fighting wars… ostensibly to prevent terrorist disasters, just as TARP was designed to prevent an economic one.
Has $1 trillion in military spending been worthwhile? Debatable. But in comparison, was $50 billon of TARP spending worthwhile? Surely. TARP is just a rounding error and it likely saved the U.S. economy from a far worse crisis than we even experienced. If you want to attack government spending there are far bigger chicken to fry.