Oct. 3, 2009 -- On the evening of Thursday, Sept. 18, 2008, in the midst of the financial meltdown, Federal Reserve chairman Ben Bernanke, along with Treasury Secretary Hank Paulson and Securities and Exchange Commission chairman Christopher Cox, traveled to Capitol Hill to meet with Congressional leaders in House Speaker Nancy Pelosi's conference room.
The goal was to get Congress to grant the government the authority to spend hundreds of billions of dollars to save the financial system from collapse.
Bernanke explained to lawmakers what type of situation they would be facing if they did not act.
"You could see a 20 percent decline in the stock market, unemployment at nine to 10 percent, the failure of GM, certainly, and other large corporate failures," Bernanke told lawmakers, according to James Stewart in the Sept. 21, 2009 issue of "The New Yorker." "It would be very bad."
Congress acted. On Oct. 3, the $700 billion Troubled Asset Relief Program was enacted.
But since Bernanke's comments on that Thursday evening last September, have developments supported his argument that the government needed to act?
As of Sept. 18 this year, the stock market had declined 13 percent, the unemployment rate had risen to 9.7 percent, GM and Chrysler both filed for bankruptcy, and large companies such as AIG and Merrill Lynch had been taken over or propped up by government funds.
Supporters say the program pulled the financial system back from the brink of disaster. The stock market has rebounded, banks are making profits again. Disaster, they say, has been averted.
Detractors counter by arguing that the program only rewarded Wall Street, the same people blamed for causing the mess in the first place. It has not, they say, helped Main Street, as unemployment has risen to a 26-year high and foreclosures have continued to climb.
Meanwhile, the bailout morphed into a much bigger program, with money for insurance companies and automakers.
According to watchdog Neil Barofsky, the special inspector general for the program, it is "highly unlikely" that taxpayers will ever get paid back their full investment.
Failure! ... No, Success!
On its one-year anniversary, it is still very much up for debate if the controversial program has succeeded or failed.
"This has been a failed program," said Sen. Mike Johanns, R-Neb., at a Senate Banking Committee hearing on Sept. 24.
However, the Obama administration -- as well as some members of Congress -- argue otherwise.
Treasury Secretary Tim Geithner has argued that, along with other emergency government efforts, the TARP brought the financial system back from the brink of collapse.
Asked at an Oct. 1 event at the Newseum in Washington just how close the financial system came to going under last fall, Geithner replied, "It came very close."
"You can't prove what would have happened in the absence of the overwhelming force that we brought to stabilize the system, but I would say a broad range of institutions, strong and weak, and a broad range of people, close and distant, really thought we were at the edge of the abyss," Geithner said. "And I share that judgment."
"I think we did the right thing," Senate Banking Chairman Chris Dodd, D-Conn., said at the Sept. 24 hearing, "and I think history will prove that to be the case."