Recession 2008
The idea behind the troubled assets relief program is that by removing the toxic assets, the otherwise sound financial institutions will be once more be able to function. Without TARP these institutions will be unable to lend to businesses and consumers, and as a result America risks a return to 1930s depression, or at the very least economic growth and job creation would be severely limited. There would be a danger of recession 2008 going on and on.
The Troubled Asset Relief Program aims to tackle the underlying problem, and restore confidence in markets and financial institutions. The federal government will implement a program to remove toxic assets that are dragging down financial institutions, and threatening economic growth.
Although taxpayers will foot the bill, Henry Paulson is confident that not implementing the Troubled Asset Relief Program would have an even more devastating effect. He states, “I am convinced that this bold approach will cost American families far less than the alternative — a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion.”
Whether Members of Congress can work together with the prompt, bipartisan action required remains to be seen. Recession 2008 could become recession of the century.
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