Has the money been paid back? Who received the money? Was it a safe precedent to establish?
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Not all the money has yet been paid back.
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There is no factual answer to your final question.
According to the Wikipedia, about $245 billion has, as of yet, been paid into TARP. Of this, the grand majority has already been paid back by the companies to whom it was lent, and overall the program is expected (by the CBO) to come out as a total loss of $19 billion. That’s pretty close to break-even really.
The list of those to whom money was lent can be seen here: Tarp - Wikipedia
There seems to have been a previous precedent, undertaken in the 1930s for a fairly similar amount of money and, likewise, ended up as a break-even on the money front.
Overall, I suspect it was a positive, giving the companies of interest time to restructure or do whatever else necessary to get themselves back on firm footing. This can be determined by the sheer fact that they were able to pay back their loans.
Since the third question in the OP has no definitive answer, this is better suited to Great Debates than GQ.
Colibri
General Questions Moderator
IIRC, the program included a tax on banks to make up any money that was lost, so it’ll be revenue neutral in the long run.
Since TARP is such a good idea, why don’t we do it for every business that loses it’s money in failed speculation and then uses the bailout to pay themselves bonuses?
Because some things are different from others?
If Penicillin is such a good idea, why don’t we use it for every illness?
We use penicillin (or other antibiotics) for similar infections, no matter the size, or well politically connected the patient is. We don’t use TARP for every similar situation do we?
Try to think of answer that’s not meant to scare crows.
I think we would use TARP for every similar situation. The next time our economic system is about to collapse and shoring up a specific businesses would fix it, we’ll hopefully do the same thing.
What you seem to not be understanding is that TARP isn’t the solution for everything, because everything isn’t threatening our economy.
Also, you don’t understand what a Straw Man is. You seem to think it’s a clumsy metaphor. In actuality, a Straw Man is pretending your opponent has outlandish views and fighting against those views, instead of his action positions.
TARP was not just a good idea, but likely a necessary thing to do to save the economic system. I doubt anyone thinks it should be used regularly. it was a strange and perilous set of circumstances that resulted in it being tried.
The auto makers have done well with the help and are hiring people and showing profits.
The bankers have destroyed the trust and faith that the people had in them. They are laying off workers and offshoring their jobs. The occupiers are showing what the people think of them now.
Which is what you did. You haven’t demonstrated that TARP was the only solution, so the economic threat is made of straw.
So what made it a good idea then? The illusion of a crisis? There would have been a crisis if nothing was done, but TARP was not the only solution. And I haven’t noticed the great improvement to the economy as a result.
I don’t know if you remember the way people were feeling back in October of 2008. The economy isn’t great, but it hasn’t completely collapsed which is what many feared would happen. I think that TARP saved us from the next depression. I think there should have been more strings attached to the money, so that the bailed out companies would feel more of a sting, but that the general plan was necessary. What alternative solutions would you have proposed? (note no 20/20 hind sight allowed).
Uh, no.
You appear to be confused about what’s happening here. You said:
I said, words to the effect of: that we don’t TARP (it’s a verb now) everything, because it’s used in specific circumstances. Namely the destruction of the economy. If we didn’t prop the banks the economy would be much, much worse than it is now.
You still don’t understand what a Straw Man is, because you think that somehow, I’m Straw Manning when pointing out the threat of economic collapse. You need to go and research the meaning of the Straw Man fallacy, because you’re using it horribly wrong and it doesn’t do your argument (such as it is) any good.
In any case, the TARP was used to keep our economy from collapsing. Could it have been done better, I’m sure it could. Was it, necessary, without a doubt.
The TARP wasn’t meant to return the economy to roses. It was meant to keep it from collapsing into ash.
You haven’t demonstrated that the economy would be destroyed or worse without TARP. But that isn’t the question. The question is “Was TARP a good idea?”. Avoiding economic collapse is not a unique feature of TARP. You might as well be saying that avoiding economic collapse is a good idea without any evidence that TARP did that, or it was the only, or best solution.
No, you’re Straw Manning when you claim the circumstances I describe are different from the one being addressed, which is not true. That’s all that’s necessary to call something a Straw Man. You still haven’t established that TARP was uniquely necessary to prevent an economic collapse.
If there was a better solution, then it wasn’t necessary. My solution was exactly the same, except the bailout would go to many victims of the con, not the con artists. And they would have more likely put the money back into the economy, which the TARP beneficiaries have largely failed to do.
What it was meant for, whatever that was, doesn’t matter.
It was a good idea in that it was politically feasible and it worked.
It can be a good idea, without being the best possible idea (including impractical or politically impossible ideas)
You’re closer on your idea of what a straw man is. But by this point, I’m just going to skip past it since you apparently have no intention of using the term correctly.
I don’t have to establish that TARP was uniquely necessary. That’s a nonsense distinction that you’re throwing out. As I say, TARP can be a good idea without being the best possible idea.
As to whether it diverted an economic collapse the consensus among economists seems to be that it’s necessary. I’m not an economist, so I trust consensus positions.
*Something *was necessary. Your better solution may not have been possible given the political considerations at the time. And two things can be a good idea.
That solution would have left the financial sector in ruins. I can’t see that as preferable.
Sure it does. You rate things based on how well they do what you designed them to do.
Look, you’re drifting from your initial stance, which was:
I’ve explained to you why that’s a bad idea.
Yes you do if your only justification is that it was necessary. You’re going further than that now, and I don’t even disagree that much.
I disagree.
Assuming you can determine what they were designed to do, and how well they’ve done that.
You haven’t addressed it at all, except for some nonsense about penicillin.
But it would be pointless to argue this out. We’ve stated our opinions. I doubt we’re going to sway each other. I enjoyed the exchange.
Just butting in… I think Lobohan’s example, penicillin, was clear, and also correct. It wasn’t a “straw man” in any way, only a metaphor, and a good one.
TARP may not have been the best medication for the symptom. Preventive medicine would have been vastly wiser, but was not politically feasible. TARP was a fairly decent medicine for the symptom.
But as for bailing out every corporation that mismanages its funds, as TriPolar suggested… Well, for one thing, we kind of do! The bankruptcy laws do pretty much that: they allow failed, even grossly mismanaged, companies to get away without paying what they owe, and that is a form of “bail out.” But going the whole distance and making their debts good? All bankruptcies? All mismanagement? Would the American taxpayer stand for it? It would cost an awful lot of money…
(I’d rather the anti-trust laws be enforced more stiffly, and companies which are “too big to fail” be broken up into competition.)
Trinopus
Yeah, I’m overly argumentative today. But I don’t think TARP was more effective than any other way of distributing the money to companies that were underwater.
Some of the benefits of TARP were psychological. It was designed in part to prevent further economic panic.
Panic is a virtually impossible thing to quantify and predict. So we’ll never know how close we came to a panic-induced collapse and whether TARP was the key factor in avoiding it and what the exact amount was that was needed.
In a case like this you’re better off erring on the side of “a little too much” in order to be sure of avoiding “not quite enough”.
Bear in mind that TARP was not one thing but rather several programs. One might reach different conclusions about the efficacy of the bank programs, the car-company programs, and the mortgage programs, for instance.