re: Don, Jr. and Ric Grenell discuss what happened and what is about to occur soon.

quote:

---

There are learned people on this forum who are still defending the insane 2008/2009 use of TARP

---

I do not get the heartburn over TARP. TARP was a lifeline loan. Further, to avoid differentiation of weaker financial institutions, healthy banks were pressured to accept TARP money along with unhealthy ones. It increased TARP success and decreased cost and repayment risk.

In the end, TARP assured solvency of major institutions which would otherwise have imploded. Those institutions, in large part, paid TARP money back with interest, as did the healthy ones, of course. It cost taxpayers little to nothing, and saved countless jobs.

Without TARP the ensuing banking catastrophe would have led to a Depression, and the economic costs would dwarf what we actually experienced.

At its implementation, BofA and Citi were teetering. FDIC exposure to those two alone was massive. Their collapse would assuredly have led to an electronic run on non-protected money elsewhere, resulting in further collapse of would-be healthy institutions. Public panic would follow, including physical runs, even including withdrawal of FDIC-protected assets under the auspices of potential FDIC collapse.

Under those circumstances and with impending Depression, any surviving banks would be severely risk-averse, crushing lending and refinance. Inevitable successive business closures would follow.

We often talk in general terms about the millennial psyche, how zoomers are more positive in outlook, etc. Much of that millennial psyche has to do with the devastating impact the 2008-2009 recession had on them. No TARP, and a resultant Depression, would have been exceedingly worse.

Relative to TARP, ZIRP and QE are different animals. They're the basis for an entirely different discussion.