Recovery Blog

Recovery Act vs. TARP

Posted in Recovery Act by on December 20, 2010

The following statements are true:

The Recovery Act is not the Troubled Asset Relief Program (TARP), and is not connected to TARP.

The Recovery Board and were created by the American Recovery and Reinvestment Act of 2009.

The chart below indicates the differences between the Recovery Act and TARP.

Signed into law by President Obama on Feb. 17, 2009 Signed into law by President George Bush on Oct. 3, 2008
Congress allocated $787 Billion for the Recovery Act Congress allocated up to $700 Billion for TARP
Enacted in response to Severe Economic Downturn Enacted in response to Sub-prime Mortgage Crisis
Commonly Known as  ARRA Commonly Known as TARP
Public Understanding of Reason for Recovery Act: To Create jobs Public’s Understanding of Reason of TARP: Bank bailout
Stated Purposes in  the Recovery Act: Spur the economy and invest in long-term growth, and Foster unprecedented levels of accountability and transparency in government spending Stated Purpose in TARP: Purchase toxic mortgage-related assets from financial institutions to provide stability to the banking system

For more information on ARRA, read the Recovery Act.

For more information on TARP, visit

4 Responses

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  1. MELISSA said, on December 21, 2010 at 12:52 pm


  2. Ryan Schattner said, on August 22, 2011 at 11:11 pm

    I think the new idea of the $20K down payment assistance for 2M buyers, and tax exemption for 1M investors is a good proposal. It will cost $40B, but will burn through a majority of the excess inventory fast (which sits at about 4M units). It will also burn through $3.5 trillion in unprocessed defaulted negative equity which will stabalize prices and the housing market. That sounds like a pretty good return.

  3. Mike the Mortgage Broker said, on September 8, 2011 at 3:57 pm

    Anything that will help young promising families invest in their first home will be beneficial to the economy during the short term. For the long term, we really need to look at systemic changes that will bring more stability and sustainability to our economy and the planet. It’s possible – we just need to look harder!

  4. Pete3jdcom said, on November 30, 2011 at 1:25 pm

    If the mortgage broker I got my mortgage from sold it to investors on Wall Street; and those investors purchased “default” insurance and collected on it after I lost my job and defaulted on the mortgage; and Fannie Mae and Freddie Mac took over my defaulted mortgage from the Wall Street investor; and TARP purchased the securities in which my mortgage was wrapped and sold on Wall Street (and across the globe); and the federal government (under TARP) is being paid back by Freddie and Fannie through preferred stock quarterly dividends; then who the hell do I owe?!?!

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