Born at the peak of the financial crisis in 2008, the Troubled Asset Relief Program expired last week, ending what was perhaps the most maligned yet most effective government program in recent memory. Despite new evidence about the low ultimate cost and positive impact of the TARP, there is still a chasm between the perceptions of the program and its overwhelmingly favorable effect on the U.S. economy.

The TARP was doomed to be unpopular from inception, because Americans were rightfully angry that the same firms that helped create the economic crisis got taxpayer support to keep their doors open. But the program was essential to averting a second Great Depression, stabilizing a collapsing financial system, protecting the savings of Americans and restoring the flow of credit that is the oxygen of the economy. And it helped achieve all that at a lower cost than anyone expected.

As we put the TARP to rest, let's also put to rest some of the myths about the TARP.

1. The TARP cost taxpayers hundreds of billions of dollars.



The true cost of the financial crisis will always be measured by the devastating losses of jobs, homes, businesses, retirement savings and fiscal revenues. But the cost of the TARP, which succeeded in reducing the overall economic damage, will be considerably lower than once feared. In fact, the direct budget cost of the program and our full investment in the insurer AIG is likely to come in well under $50 billion -- $300 billion less than estimated by the Congressional Budget Office last year. And taxpayers are likely to receive an impressive return (totaling tens of billions) on the investments made under the TARP outside the housing market.

Even looking beyond the TARP to the losses associated with Fannie Mae and Freddie Mac's pre-crisis mistakes, the direct costs of the government's overall rescue strategy are likely to be less than 1 percent of GDP. By comparison, the much less severe savings and loan crisis of the late 1980s and early 1990s cost 2 1/2 times that as a share of our economy.

2. The TARP was a gift for Wall Street that did nothing for Main Street.



Financial crises matter not because they hurt banks and bankers. They matter because they kill jobs, businesses and the value of retirement savings. To protect Main Street from the damage caused by a financial crisis, you must first put out the financial fire. That is precisely what the government did.

In the fall of 2008, the Bush administration injected nearly $250 billion into our largest financial institutions and provided a guarantee, for a fee, to help them continue to operate. Those emergency actions, taken at a time of grave danger for the U.S. economy, were absolutely essential. Without them we would have seen a broader collapse and losses of millions more jobs and trillions more dollars in income and savings.

Those initial investments, which came with limited conditions designed to protect taxpayers, helped stop the free fall of the financial system. But by the time President Obama took office, credit markets were still severely distressed and the economy was contracting at an accelerating rate.

So we shifted strategy to recapitalize the financial system with tough conditions and with private money, not public funds. And we focused resources directly on the victims of the crisis, rather than on the institutions that helped cause it. After inheriting nearly $300 billion in commitments, mostly to large companies, we directed resources toward lowering mortgage rates, reducing foreclosures and helping restart the credit markets for consumers and small businesses.

In addition to the nearly $300 billion in tax cuts in the Recovery Act for working Americans and businesses, the new initiatives on which we spent TARP funds were for broad-based programs to lower lending costs and mortgage payments. And where we inherited commitments to individual institutions -- such as AIG and auto companies -- we acted to ensure that those companies were fundamentally restructured so they could survive without government assistance and ultimately repay the taxpayer.

3. The TARP was a quick fix for the market meltdown but left our financial system weak.



The U.S. financial system has been completely overhauled and is in a much stronger position today than before the crisis. In fact, the weakest parts of the system are gone.

Of the 15 largest financial institutions before the crisis, four are no longer independent entities. Five were forced to restructure. Two have altered their legal form and are subject to much stricter federal oversight. Ten have seen major changes in senior management and boards of directors.