Patryk Kwasniak

 

Paper topic: TARP and why was it necessary?

 

Question: Why was the Troubled Asset Relief Program (TARP) a necessity in preventing a second great depression from occurring on a global scale?

 

Argument: Immediately following the financial crisis of 2008 and in the years that followed many observers debated whether TARP should have been initiated by the government and should we have let some of these institutions fail instead. I will be arguing that although yes TARP was and still is controversial it was a necessity to avoid the collapse of not only our economy but the global financial system as well.

 

Defense: I will defend my argument by firstly, explaining what TARP is and what its purpose was in order for the reader to grasp a better understanding of it. I will then proceed to speak about how TARP re-capitalized the financial sector propping up some of these companies and preventing the disappearance of financial intermediaries which would have been catastrophic for the economy. I will also mention how the Treasury Department under TARP, temporarily guaranteed money market mutual funds, stemming the out flow of capital by institutions. As well as a few additional measures that restored confidence in the financial system. And prevented the escalation of the crisis into a second great depression.