The Starting Point is a snapshot of the news that occurred overnight and a preview of the stories we expect to cover today.

Top story

Nearly two years after the United States government bailed out the financial sector, the controversial Troubled Asset Relief Program (TARP) will expire on Oct. 3, ABCNews reported.

Two weeks after the TARP launched, the Treasury Department modified the program to include buying senior preferred stock and warrants in the nine largest American banks. This gave the banks money to lend, and allowed the government to regulate executive bonuses. In December of that same year, President Bush extended the use of the TARP funds to support the auto industry.

Some companies, such as JPMorgan Chase, Capitol One Financial and Goldman Sachs, have repaid their loans, The New York Times reported. However, according to the Wall Street Journal, more than 600 institutions are still sitting on about $65 billion in bailout funds.

The results of the TARP are widely debated. Some economists say the program cost less than expected and helped to end the recession. Others believe the companies that received bailouts used the money for strategic acquisitions and to pay down debt rather than to increase lending to the struggling private sector.

The TARP was also unpopular with the majority of Americans, who felt its limited success was only enjoyed by the companies that caused the financial difficulties in the first place.

“Popular anger remains high about taxpayer support of America’s largest banks, and that anger has only intensified in light of the continuing economic turmoil,” The Congressional Oversight Panel reported. “The TARP’s unpopularity may mean that, unless the program’s effectiveness can be convincingly demonstrated, the government will not authorize similar policy responses in the future. Thus, the greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises.”

 

Source: Yahoo news