Some say it prevented another great depression while others position it as "the day America died."
These diametrically opposing views are among many that helps make the Troubled Assets Relief Program, better known as TARP, one of the most controversial and poorly named government bailouts ever enacted.
Even though TARP has expired and will up costing much less than the government originally anticipated, a large segment of the American population, including voters according to pollsters, have strong negative feelings about the bailout.
A Pew Research Center poll released this week shows 46 percent of those surveyed would be less likely to vote for a candidate who supported TARP, while only 13 percent said they would be more likely to back such a candidate.
How much did it really cost?
Most complaints are over taxpayer money going to companies that hand out millions of dollars in bonuses and anger over giving money to the banks and financial services firms that caused the crisis that led to a devastating recession and double digit unemployment.
The notion that the program is now forecast to cost taxpayers between a mere $51 billion according to the Treasury Department official who ran it, instead of the original $356 billion, doesn't appear to have diminished voter venom. Especially when you consider how many jobs $50 billion could create.
To further confuse the issue, the Treasury Department estimates TARP may wind up costing taxpayers as little as $29 billion if it takes into account interest and dividends paid by banks that received TARP money or profits from other, non-TARP aid to companies like the insurance firm American International Group (AIG).
Meanwhile, the TARP congressional oversight panel says the two-year program only used $507 billion of the original $700 billion.
How was the money used?
The Treasury Department official who was in charge of handing out that TARP money, Herb Allison, posted
a blog on The Huffington Post this week removing the veil, pardonthe pun, on where some of that TARP money went and what it accomplished.
Allison, who resigned 11 days before the bailout program expired, writes that investments made in GM and Chrysler, "...turned those automakers around and saved at least one million jobs....In fact, independent experts have estimated that overall, without the federal government's response to the financial crisis, including TARP, there would be nearly 8.5 million fewer jobs today and the unemployment rate would exceed 15%."
Myths about TARP persist
Allison contends that the main reason TARP remain unpopular is due to "a number of myths about the program stubbornly persist.
For example, he says three-fourths of the TARP funds provided to banks have already been returned and that many people think that TARP funds only went to Wall Street. Allison says "more than 450 small and community banks participated in TARP, which helped them deliver credit to local small businesses and families.
Additionally, more than 3.3 million struggling homeowners have had an opportunity to stay in their homes or find more affordable alternatives because of foreclosure prevention programs either financed by TARP or created as a result of TARP in the private sector."
The former Treasury official reminds us that TARP was enacted in an all-too-rare
moment of bipartisan cooperation in Washington - with support from both sides of the aisle. "Now," writes Allison, "many of those who supported TARP have decided that, politically, they need to be against it.... Perhaps someday they'll say what is now, for them, the unspeakable: TARP was a success."
It's unlikely we'll hear many candidates up for election admit that before November or possibly even before the next presidential race in 2012. To say the subject is political poison is an understatement.
Even though TARP was a Bush administration initiative and got strong Republican Congressional support in 2008, today's GOP candidate portray it as Wall Street bailout disguised as Democrats' "slush fund" according to Sen. Mike Johanns,
(R-Neb.) who was quoted in the Wall Street Journal as saying "I would come to the office in the morning and see the latest thing the president has spent money for out of the TARP fund. It just turns my hair gray."
When it was first proposed by former Treasury Secretary Henry Paulson, TARP money was supposed to be used to buy toxic assets from banks to strengthen their balance sheets and allow them to resume lending, thus the "troubled asset relief" wording.
But soon after the program was announced, Paulson changed his mind and instead gave the banks $245 billion. This sparked a firestorm that continues to smolder even if the alternative could have been a total meltdown of our financial system.
The fact that these companies used some of this money to pay their executives hefty bonuses only made it more difficult to defend the program. The main problem is that most people don't really understand how our financial system works and that's something Wall Street and Washington need to address.
They can talk all they want about transparency and financial reform but until they can show, in a way Americans can comprehend it, how TARP saved this country their words will fall on deaf ears.
