$ (Billions)
$ 306 Guarantee Citi-Corp Debt
$ 700 TARP
$2,400 10-27-2008 program to buy commercial paper
$1,400 10-14-2008 program FDIC guarantee bank-to-bank loans
$ 29 to JP Morgan to engineer buyout of Bear Stearns
$ 122.8 AIG
$ 20 Treasury injection to Citi-Corp
$2,300 Commercial Paper Funding Facility/MMIFF
$ 300 FHA "Hope for Homeowners" distressed mortgage
$ 200 Shore up Fannie & Freddie (promised, not allocated)
$ 139 Loan guarantees to General Electric's finance unit
$ 29 "Wells Fargo Notice" - Tax Break for Wachovia purchase
______
$7,945.8
Almost 8 trillion dollars.
$ 7,945,800,000,000
In response to Bloomberg's FOIA attempt and federal suit aimed to force the Fed to disclose which banks will get the loot, and what collateral that will put up in return, we learn of a considerable difference of opinion between Bernanke's views and those of the chief economist at a banking corporation:
“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”
The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. and a former research economist at the Federal Reserve Bank of Chicago.
“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.
Some of the most chilling comments come from Treasury Secretary Paulson, one of so many in the Bush administration that seem to not get anything right:
Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.
“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.
In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.
“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.
A haircut refers to the practice of lending less money than the collateral’s current market value.
Oh for the days when we could wring our hands over mere $400 haircuts not paid for by tax dollars.
And then there's this:
Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.
What does David Tobin know that the rest of us don't?
Meanwhile, at Counterpunch, Kevin Zeese finds some research that helps put (a mere) $7.6 trillion in perpective, and asks some good questions:
We don’t know where the bottom is yet, see no evidence that the bailout is working and already, as Barry Ritholtz, author of "Bailout Nation," points out, the bailout has cost more than Marshall Plan, Louisiana Purchase, moonshot, S&L bailout, Korean War, New Deal, the Iraq war, the Vietnam war, and NASA's lifetime budget – COMBINED! In fact, the bailout is almost double:
- Marshall Plan: Cost: $12.7 billion,
Inflation Adjusted Cost: $115.3 billion
- Louisiana Purchase: Cost: $15 million,
Inflation Adjusted Cost: $217 billion
- Race to the Moon: Cost: $36.4 billion,
Inflation Adjusted Cost: $237 billion
- S&L Crisis: Cost: $153 billion,
Inflation Adjusted Cost: $256 billion
- Korean War: Cost: $54 billion,
Inflation Adjusted Cost: $454 billion
- The New Deal: Cost: $32 billion (Est),
Inflation Adjusted Cost: $500 billion (Est)
- Invasion of Iraq: Cost: $551 billion,
Inflation Adjusted Cost: $597 billion
-Vietnam War: Cost: $111 billion,
Inflation Adjusted Cost: $698 billion
- NASA: Cost: $416.7 billion,
Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
You’d think for $7.7 trillion we’d get health care for all, tax relief or free college education! But Americans got none of that. Is this a wise use of tax dollars? Are there better ways to use this money? Will this trickle down approach work this time, even though it has failed in the past?
