What is TARP?
No, not that kind!
If it hasn’t happened already, the next time you find yourself at a cocktail party or even the local bar, you are likely to hear people talking (read: complaining) about the government and the bailout. Then you’re going to hear the word “TARP” uttered by someone. Instead of the normal head nodding you do followed by a short prayer that no one asks your opinion, this time come prepared.
Definition: TARP = Troubled Asset Relief Program
A story in today’s Wall Street Journal describes with some detail where half of the $700 billion has been committed so far. Even if you don’t read it, come away from this post knowing that $45 billion has been committed to Citigroup, $40 billion was lent to AIG, the 3 major U.S. auto companies (GM, Ford, Chrysler) WANT billions but haven’t been given anything yet, and Henry Paulson (the Treasury Secretary) is under fire for being wishy washy about what to do with the other half of the $700 billion.
In short, Paulson is in a situation similar to a mom giving a child $10 to buy candy for the child’s friends only to have 78 “friends” tag along. To top it off, a different “mom” is going to replace the current “mom” in a couple months. Hard to believe, but $700 billion appears to be nowhere near enough to solve this credit crisis. Feel free to use the candy analogy while sucking down your fourth Fat Tire of the night as you are asked what you think of Paulson.
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