Treasury Claims TARP Prevented Depression; Other Economists More Skeptical of Bailout

Government assistance programs for homeowners facing foreclosure have fallen short of their goals, and small banks are still struggling with their loan portfolios, but the Troubled Asset Relief Program prevented the “second Great Depression,” a Treasury official testified March 4 before the Congressional Oversight Panel (COP).

Timothy Massad, acting assistant secretary for the Office of Financial Stability, said steps taken to staunch the losses from the financial collapse and to expedite the recovery were necessary, and they will cost taxpayers less than expected.

TARP is generally expected to end up costing taxpayers between $25 billion and $50 billion.

“We did ...