Policy
How does TARP troubled asset relief program compare to Trump administration CARES coronavirus act relief and economic security act of March 2020 and the recent Biden legislation called ACA America cares act February 2021 of 1.9 trillion and the proposed $3 trillion American jobs plan build Americans jobs plan recently debated in congress?
Policy
The Troubled Asset Relief Program (TARP) was introduced in the wake of the 2008 financial crisis by the US treasury to restore the country’s economic growth, stabilize the financial system, and mitigate foreclosures (Stone, 2020). The targets were to be achieved by purchasing the stock and assets belonging to troubled organizations. The initial goal was to increase money markets liquidity and secondary mortgage markets by purchasing mortgage-backed securities (MBS). That would therefore reduce the potential losses of the institutions they belonged to.
The US lawmakers passed a $2 trillion stimulus bill in March 2020, known as the Coronavirus Aid, Relief, and Economic Security Act (CARES). It was meant to blunt the impact of the economy, which was already deteriorating due to the coronavirus pandemic. President Trump signed the bill into law on March 27, 2020. The legislation crafted dedicated historic funding from the government that supported businesses, hospitals, industries, families, individuals, independent contractors, and gig workers. The American Job Plan is meant to create job opportunities, rebuild the country’s infrastructure, and grow the economy.
President Biden signed the American Rescue Plan Act 2021 into law on March 11. The law was to rebuild the country’s economic backbone and give people a chance to fight. $1.9 trillion was provided to facilitate the Affordable Care Act and health insurance coverage. All the mentioned programs are similar in that they have to be signed by the president to become laws. They are meant to stabilize the country’s economy, relief, healthcare, and businesses. There are differences, and they depend on the type of aid provided and the market sector. CARES Act is the mini to the TARP stimulus based on the scope and size. Its resultant enforcement activity seems to outpace TARP.
Reference
Stone, C. (2020). Fiscal Stimulus Needed to Fight Recessions. Center on Budget and Policy Priorities, April 16.
