http://abcnews.go.com/print?id=6332892
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Financial Bailout Balloons to the Trillions
More Than Just TARP, the Bailout Is the Costliest U.S. Expenditure Ever
By RUSSELL GOLDMAN

Nov. 25, 2008—

The government's financial bailout will be the most expensive single expenditure in American history, potentially costing around $7.5 trillion -- or half the value of all the goods and services produced in the United States last year.

In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion. The bailout will cost more than the total combined costs in today's dollars of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing, according to data compiled by Bianco Research.

It remains to be seen whether the government's multipronged approach to bail out banks, stimulate spending and buy up mortgages will revive the economy, but as the tab continues to grow so does concern over where the government will find the money.

Monday the government guaranteed an additional $306 billion to bail out Citigroup, and today Treasury Secretary Henry Paulson pledged $800 billion to make credit more available to consumers and small businesses, and to buy up mortgages from Fannie Mae and Freddie Mac.

Congress last month allocated $700 billion for an emergency bailout of some of Wall Street's most storied firms by purchasing their troubled assets. The funds allocated through the Troubled Assets Relief Program are but a small part of the government's overall bailout spending.

Bailout programs also include a Federal Reserve plan to buy as much as $2.4 trillion in short-term notes called commercial paper that began Oct. 27, and an FDIC plan to spend $1.4 trillion to guarantee bank-to-bank loans that commenced Oct. 14, according to Bloomberg News, which first compiled the total cost of the bailout.

In March, the government spent $29 billion to help JPMorgan Chase take over Bear Stearns and allocated $122.8 billion in addition to TARP to bail out AIG, once the world's largest insurance company.

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http://www.nytimes.com/2008/11/26/business/economy/26fed.html?_r=1

By EDMUND L. ANDREWS
Published: November 25, 2008

WASHINGTON — The Federal Reserve and the Treasury announced $800 billion in new lending programs on Tuesday, sending a message that they would print as much money as needed to revive the nation’s crippled banking system.

The gargantuan efforts — one to finance loans for consumers, and a bigger one to push down home mortgage rates — were the latest but probably not the last of the federal government’s initiatives to absorb the shocks that began with losses on subprime mortgages and have spread to every corner of the economy.

In the last year, the government has assumed about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy and far eclipses the $700 billion that Congress authorized for the Treasury’s financial rescue plan.

Those obligations include about $1.4 trillion that has already been committed to loans, capital infusions to banks and the rescues of firms like Bear Stearns and the American International Group, the troubled insurance conglomerate. But they also include additional trillions in government guarantees on mortgages, bank deposits, commercial loans and money market funds.

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http://www.bloomberg.com/apps/news?pid=20601109&sid=an3k2rZMNgDw&
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Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Too Big to Fail

Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.

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http://counterpunch.org/zeese11262008.html
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November 26, 2008
Are We Getting Our Money's Worth?
The Real Cost of the Bailout

By KEVIN ZEESE

$7.6 trillion.

That is what Bloomberg reports has been committed on behalf of the American taxpayer to bailout America’s finance system. This includes spending by the Treasury, Federal Reserve and FDIC.

- The amount is equal to half the value of everything produced in the United States last year.

- It is $24,000 for every man, woman and child in America, that is nearly $100,000 for a family of four.

- It's nine times what the U.S. has spent so far on wars in Iraq and Afghanistan.

- It is enough money to pay off more than half the country's mortgages, but bankruptcies have continued despite the bailout.

We do not even know where all of those funds have gone. The taxpayer is putting up a King's ransom and not being told who is receiving it. We guarantee the debts of banks and are not being told what collateral is provided or who is receiving the funds. Before receiving the bailout funds, Treasury Secretary Paulsen promised transparency. But, Federal Reserve Chairman Bernanke says that such transparency would be "counterproductive."

All of this money and yet foreclosures, bankruptcy and unemployment are all up; the stock market, consumer spending and housing prices are down. Pouring tax dollars into banks is not working.

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?

We’re doing two things:

First we are working to break the bailout. Join us at BreakTheBailout.com and pledge to help Break the Bailout. On December 7, we take the first step toward taking back our economy and transforming it into an economy that puts the people’s interests first. Pledge today and help build a movement that will stop the top down trickled down Wall Street economics and build the economy from the bottom up.


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