Question

TARP allows the United States Department of the Treasury to purchase or insure up to $700 Billion of "troubled assets", defined as "(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase of which the Secretary determines promotes financial market stability; and (B) any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress."[7]

Answer 1

TARP was enacted in 2008 to stabilize the financial market by allowing the U.S. Treasury to purchase troubled assets, which helped avoid broader economic collapse and supported major U.S. companies through the crisis.

Step-by-step explanation:

The Troubled Asset Relief Program, commonly referred to as TARP, was a pivotal part of the United States government's response to the financial market crisis in 2008. This program authorized the United States Department of the Treasury to purchase or insure up to $700 billion in troubled assets to stabilize banks and other financial institutions.

At the peak of the financial crisis, TARP funds were also used to support major companies such as General Motors and Chrysler, helping to avoid massive job losses and aiding these companies to eventually return to profitability. Additionally, TARP was complemented by the Federal Reserve's actions to inject liquidity into the economy and the American Recovery and Reinvestment Act, which aimed to stimulate consumer spending and promote economic growth.

As part of these economic and healthcare reforms, President Barack Obama took charge of TARP, overseeing the distribution of funds to strengthen the banking system and assist struggling automakers. By 2013, a significant portion of the bailout funds had been repaid. This intervention, arguably, helped to prevent a more severe economic collapse and set the stage for a gradual recovery.