DOCUMENT-BASED QUESTIONS DOCUMENT D A major part of the Federal Government's response to This is an excerpt from an article written when TARP the Great Recession of the early 2000 s was Secretary of officially expired. the Treasury Henry Paulson's proposed bailout plan, the [T]he TARP bailout was a terrible idea that will Troubled Asset Relief Program, or TARP. TARP provoked cost taxpayers both directly and indirectly through its strong reactions from the public. perverse incentives.... DOCUMENT A The U.S. Treasury established several programs under TARP to help stabilize the U.S. financial system. - Approximately $250 bilion was committed in programs to stabilize banking institutions... - Approximately $27 billion was committed through programs to restart credit markets. Approximately $82 billion was committed to stabilize the U. Auto industry... - Approximately $70 billion was committed to stabilize American International Group (AIG)... The TARP was crooked from the very start, using taxpayer funds to bail out some of the world's richest people from their own foolish investments... Even worse, TARP taught investment bankers an important lesson: During a boom, make as much money as you can, no matter how short-term the profits will be. When the bubble pops, the Treasury and Fed will be there with a taxpayer-funded pillow. - Robert P. Murphy, "Was TARP Good for the Taxpayers?" Ludwig Van Mises institution, October 7, 2010 - Approximately $46 billion was committed for 22. Which view of TARP would Simon Johnson most likely programs to help struggling families avoid foreclosure... agree with? -www.treasury.gov A. It was essential to avoid severe economic problems. B. It was a reward to the wealthy. C. It was inadequate in scope. D. It was an excessive burden on the taxpayers. This excerpt is from an article opposing the bill that established TARP. 23. Which view of TARP is shared by the writers Benjamin, Congress votes this week on the biggest giveaway Gupta, and Murphy? of our tax dollars to the financial sector in our nation's planning. as a compromise bill that helps both Wall Street and B. It was an economic necessity. Main Street, in reality it represents an appalling transfer C. Its main effect was to bail out the wealthy. of wealth upward. D. It was a plan the poor. - Medea Benjamin and Arun Gupta, "Time for a 24. Writing Task) Use the data given in Document A to create a pie chart showing how the $475 billion in TARP funding was allocated to various programs. Be DOCUMENT C careful when specifying units of measure and calculate was established. TARP was an essential piece of a necessary evil.... you use the information in your chart and Documents to argue that TARP was not really necessary. Banks B-D to take a position on the following question: could have been allowed to fail and the economic effective points regarding TARP? Why? fallout around the world would not have been so (1) Prechact (2) Paragraph (3) Have pape dramatic. This was, of course, the view taken by policy makers in 1929-31, after the Great Crash.... revilwed The result was the Great Depression. No responsible policy maker would want to run that risk again. - Simon Johnson, "TARP, the Long Goodbye," The New York Times, September 30, 2010 DOCUMENT-BASED QUESTIONS DOCUMENT D A major part of the Federal Government's response to This is an excerpt from an article written when TARP the Great Recession of the early 2000 s was Secretary of officially expired. the Treasury Henry Paulson's proposed bailout plan, the [T]he TARP bailout was a terrible idea that will Troubled Asset Relief Program, or TARP. TARP provoked cost taxpayers both directly and indirectly through its strong reactions from the public. perverse incentives.... DOCUMENT A The U.S. Treasury established several programs under TARP to help stabilize the U.S. financial system. - Approximately $250 bilion was committed in programs to stabilize banking institutions... - Approximately $27 billion was committed through programs to restart credit markets. Approximately $82 billion was committed to stabilize the U. Auto industry... - Approximately $70 billion was committed to stabilize American International Group (AIG)... The TARP was crooked from the very start, using taxpayer funds to bail out some of the world's richest people from their own foolish investments... Even worse, TARP taught investment bankers an important lesson: During a boom, make as much money as you can, no matter how short-term the profits will be. When the bubble pops, the Treasury and Fed will be there with a taxpayer-funded pillow. - Robert P. Murphy, "Was TARP Good for the Taxpayers?" Ludwig Van Mises institution, October 7, 2010 - Approximately $46 billion was committed for 22. Which view of TARP would Simon Johnson most likely programs to help struggling families avoid foreclosure... agree with? -www.treasury.gov A. It was essential to avoid severe economic problems. B. It was a reward to the wealthy. C. It was inadequate in scope. D. It was an excessive burden on the taxpayers. This excerpt is from an article opposing the bill that established TARP. 23. Which view of TARP is shared by the writers Benjamin, Congress votes this week on the biggest giveaway Gupta, and Murphy? of our tax dollars to the financial sector in our nation's planning. as a compromise bill that helps both Wall Street and B. It was an economic necessity. Main Street, in reality it represents an appalling transfer C. Its main effect was to bail out the wealthy. of wealth upward. D. It was a plan the poor. - Medea Benjamin and Arun Gupta, "Time for a 24. Writing Task) Use the data given in Document A to create a pie chart showing how the $475 billion in TARP funding was allocated to various programs. Be DOCUMENT C careful when specifying units of measure and calculate was established. TARP was an essential piece of a necessary evil.... you use the information in your chart and Documents to argue that TARP was not really necessary. Banks B-D to take a position on the following question: could have been allowed to fail and the economic effective points regarding TARP? Why? fallout around the world would not have been so (1) Prechact (2) Paragraph (3) Have pape dramatic. This was, of course, the view taken by policy makers in 1929-31, after the Great Crash.... revilwed The result was the Great Depression. No responsible policy maker would want to run that risk again. - Simon Johnson, "TARP, the Long Goodbye," The New York Times, September 30, 2010