Final answer:
The Troubled Asset Relief Program (TARP) was a crucial initiative by the U.S. government to stabilize the financial market by injecting funds into financial institutions and supporting major U.S.
automakers during the 2008 financial crisis. It was followed by the American Recovery and Reinvestment Act, which provided tax rebates to encourage consumer spending.
Step-by-step explanation:
The Troubled Asset Relief Program (TARP), enacted in October 2008 under President George W. Bush, was a pivotal response by the U.S. government during the financial crisis.
TARP aimed to stabilize the financial market by allowing the government to purchase assets and equity from financial institutions that were in distress due to the subprime mortgage crisis.
This program provided vital support to major entities such as General Motors and Chrysler, preventing significant job losses and averting potential bankruptcies.
Additionally, the subsequent American Recovery and Reinvestment Act of early 2009 complemented these efforts by providing tax rebates to stimulate consumer spending among low- and middle-income households.
Notably, President Barack Obama, who took office in 2009, continued to oversee TARP's implementation, whereby a substantial amount of funds was directed towards repairing the banking system.
The initiative also encompassed aiding major U.S. automakers, which contributed to the revival of the auto industry. By infusing nearly $80 billion into Chrysler and General Motors, the automakers were able to return to profitability and repay a considerable portion of their bailout funds by 2013.