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| Government bailout hits $8.5 trillion |
| 2008-12-02 |
| A few days old. The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News. That sum represents almost 60 percent of the nation's estimated gross domestic product. Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years. The money has been committed to a wide array of programs, including loans and loan guarantees, asset purchases, equity investments in financial companies, tax breaks for banks, help for struggling homeowners and a currency stabilization fund. Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in "unusual and exigent circumstances," to other financial institutions. To stimulate lending, the Fed said on Tuesday it will purchase up to $600 billion in mortgage debt issued or backed by Fannie Mae, Freddie Mac and government housing agencies. It also will lend up to $200 billion to holders of securities backed by consumer and small-business loans. All but $20 billion of that $800 billion represents new commitments, a Fed spokeswoman said. About $1.1 trillion of the $8.5 trillion is coming from the Treasury Department, including $700 billion approved by Congress in dramatic fashion under the Troubled Asset Relief Program. The rest of the commitments are coming from the Federal Deposit Insurance Corp. and the Federal Housing Administration. Only about $3.2 trillion of the $8.5 trillion has been tapped so far, according to Bloomberg. Some of it might never be. Relatively little of the money represents direct outlays of cash with no strings attached, such as the $168 billion in stimulus checks mailed last spring. Rest at link |
| Posted by:ed |
| #16 Yeah...we're suppose to eat cake. |
| Posted by: 3dc 2008-12-02 23:01 |
| #15 I never thought we'd see anything like the market interventions we've seen under a Republican president. Let's face it - Bush isn't just a big government Republican like Nixon - he's the second coming of FDR, squared. After Bush's insane market interventions, anything under Obama is going to look like business as usual. |
| Posted by: Zhang Fei 2008-12-02 22:56 |
| #14 Everything was right except this. > Our recession will never end if we save companies that don't deserve to exist. Nope, it's worse, a recession will turn into a depression if you do this. |
| Posted by: Bright Pebbles 2008-12-02 16:50 |
| #13 Poorly run and greedy companies deserve to go belly up. Money should be committed to deposit insurance funds, and that is it. In any case, loans appear as assets on the balance sheets of financial institutions. Non-performing assets still have value. If we stand clear, these would have to be sold for peanuts. Japan's 12 year economic crisis has been prolonged by the insistence that everything be paid back, and not be written off as a worthless asset. Our recession will never end if we save companies that don't deserve to exist. |
| Posted by: Albemarle Glavising7413 2008-12-02 16:27 |
| #12 The United Coasts and the Republic of Flyover continued their war over the state of Utah, and it's strategic stockpile of photocopiers. |
| Posted by: Bright Pebbles 2008-12-02 15:41 |
| #11 A dictator takes power.....US becomes a bunch of provincial enclaves. Posted by: Alaska Paul 2008-12-02 12:50 His Royal Hieness Obama? California, Oregon, Washington State, Veermont? That's two down. Next.... |
| Posted by: Jineth Pelosi8836 2008-12-02 14:24 |
| #10 Provincial enclaves? I might have to move to Texas. |
| Posted by: Ebbang Uluque6305 2008-12-02 14:06 |
| #9 Ressurect "Dixie". (Minus the slavery and race problems) I love Gracious living, Y'all. |
| Posted by: Redneck Jim 2008-12-02 13:31 |
| #8 I don't know, provincial enclaves sounds ok to me. The 'Red State Block' would be a nice place to live. |
| Posted by: bigjim-ky 2008-12-02 13:04 |
| #7 It will end when the currency collapses, when nobody, even the Chicoms will have any faith in our currency. Then the road splits into a number of forks. The people will have had enough and throw the criminals out. A dictator takes power, a military coup happens, or the US becomes a bunch of provincial enclaves. Or we become Zimbob on the installment plan. We are throwing good money that we do not have into a financial black hole, which can never be filled. There is no oversight and accountability. You want energy independence? Where are you going to get the money? A gas pipeline from Alaska to Alberta will cost $20 to 40 billion? What banks can raise that kind of capital? It would take a consortium of banks to do it. I do not see anybody stepping up to the plate. Who is going to buy Treasury bonds? A free press, which is necessary for a democratic form of government to flourish, cannot even ask questions. They have failed in their duty. This whole thing is like a disease that must run its course. I hope that the nation survives it. |
| Posted by: Alaska Paul 2008-12-02 12:50 |
| #6 Holy moly! The U.S. GDP is only a little over $13 trillion. Where's this whole thing going to end? |
| Posted by: JohnQC 2008-12-02 12:17 |
| #5 The rate of bailout growth is worrying. Last week the total disbursed funds was a bit over $2T. The burn increased by nearly a trillion in only 1 week. Won't even make it to Christmas at this rate. |
| Posted by: ed 2008-12-02 10:31 |
| #4 Y'all should have took me up on the $2trl bet; I thought I bid ludicrously high but hey now wasn't even a quarter. |
| Posted by: swksvolFF 2008-12-02 10:27 |
| #3 Our treasury is so empty, it has become a black hole. Added taxes and spending that Obama is wanting will tip the rescission into a depression. |
| Posted by: DarthVader 2008-12-02 09:47 |
| #2 And couldn't we have bought EVERY questionable mortgage in the country for considerably LESS than that? |
| Posted by: bigjim-ky 2008-12-02 09:09 |
| #1 Um....Do we HAVE $8.5 Trillion? |
| Posted by: bigjim-ky 2008-12-02 09:07 |