Question

What was the purpose of the Troubled Assets Relief Program (TARP) in late 2008?

Answer 1

"To stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures."

Many Americans criticized the Troubled Asset Relief Program (TARP) because it helped those who had caused the financial crisis.  TARP was authorized by Congress in October, 2008.  It initially set aside $700 billion for use in government intervention; that amount was then reduced to $475 billion in 2010 by the Dodd-Frank Wall Street Reform and Consumer  Protection Act (Dodd-Frank Act for short).   The US Treasury Department "established several programs under TARP to help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures" (US Department of the Treasury information).  The biggest chunks of money went to the banking industry ($250 billion) and to the American International Group (AIG), a multinational finance and insurance corporation ($70 billion).  These banking and finance groups were the ones largely responsible for the crisis in economic markets. But because they were considered "too big to fail," the government bailed them out.  The US automotive industry also received bailout funds ($82 billion).  About $46 billion was set aside for programs to help homeowners avoid bank  foreclosure on their homes, but that was seen as small help compared to the huge aid granted to the companies and industries that had created the crisis in housing and economic markets.

Answer 2

In September of the year 2008, Troubled Assets Relief Program (TARP) was created in order to restore the nation's financial ability and be able to restart economic growth. During this year, the country was faced with various circumstances that were feared to lead it to the second Great Depression.