Tim Massad, the assistant secretary to the U.S. Treasury, said last week that the Troubled Asset Relief Program, despite its unpopularity, “is perhaps the best recent example of effective, bipartisan government.”
Speaking before the Brookings Institution, Massad pointed to the bipartisan passage of TARP, saying the program was enacted “quickly, boldly and wisely” across two administrations, one Republican and one Democrat.
“Even though the pain from this terrible recession is still with us in many ways, as a result of the actions taken through TARP and other measures, the impact of the financial crisis on families and communities was much less than it might have been,” Massad said. “Our financial system did not collapse. The economy is growing again. And TARP is almost completely wound down.”
Massad said, however, that the recovery from the 2008 financial crisis and the stabilization of the U.S. financial system should not be credited to just TARP or the Treasury, adding that the program was just one part of a “coordinated federal response” involving the administrations, Federal Reserve and other federal agencies.
“The purpose of the actions taken under TARP was to make sure our financial system did not collapse,” Massad said. “The financial system is the circulatory system for our nation’s financial and economic health… And without TARP and the government’s other emergency measures, the pain experienced by Americans would have been far greater, recovery would have been far slower, and the ultimate cost to repair the damage would have been far higher.”
Massad said it is impossible to know with certainty what would have happened without government intervention.
“So as TARP moves into the history books, it’s my hope that its greatest legacy will be this – that when the nation was confronted with an extraordinary challenge – in this case, the potential collapse of our entire financial system – government rose to the occasion,” Massad said.