The real bailout cost? $7.4 trillion - Top Stocks Blog - MSN Money
 
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The real bailout cost? $7.4 trillion

Posted Nov 24 2008, 12:28 PM by Kim Peterson
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We were suckered into believing the bailout would only cost $700 billion. Turns out the government is set to lend at least $7.4 trillion to rescue the financial system, says Bloomberg. That's half the value of everything produced in the country last year.

How is this possible? In an impressive bit of investigative reporting, Bloomberg went out and collected data from the Fed, the Treasury and the FDIC to figure out the full extent of the government rescue effort. I suspect not even the government has done this kind of research on its spending programs.

How does the government blow through $7.4 trillion? Here are the ways:

$2.8 trilion -- Already been tapped by banks and other financial institutions

$2.4 trillion -- Set aside to buy short-term notes, or commercial paper, that companies use to pay bills

$1.4 trillion -- Used by the FDIC to guarantee loans banks make to each other

$29 billion -- To help with the Bear Stearns takeover

$123 billion -- Bailout for AIG 

$326 billion -- Bailout for Citigroup

$200 billion -- Promised to Fannie Mae and Freddie Mac

$139 billion -- Loan guarantees for General Electric's finance unit

To put this into perspective: That money is equal to spending $24,000 on every man, woman and child in the country, Bloomberg says. It would pay off more than half of the mortgages in the U.S.

Related reading:

Fed pledges top $7.4 trillion to ease frozen credit

Insurance companies angle for bailout

Treasury defends bailout bait-and-switch

$50 billion of bailout going to employee bonuses

Economists criticize bailout plans

Who isn't getting bailout money these days?

Comments

 

Remember who government really is, republicans trying to bankrupt it for the sake of business, its best customer.  Don't worry, we can take revenge by saving instead of spending and watch the business world Whine like a baby.  Isuggest that we offer them some cheese with their whine.

THE SITUATION THAT WE ARE NOW FACIING IS ALOT MORE COMPLICATED THEM MOST OF US COME TO REALIZE.  IN MY OPINION, FOR OUR COUNTRY TO PULL OUT OF THIS HOLE THAT WE DUG OURSHELVES INTO, DECADES AGO, WE NEED TO FIRST OF ALL TASTES WHATS IT LIKE TO NOT KNOW IF THERE'S GOING TO BE FOOD ON THE TABLE THE NEXT DAY FEELING.  WE, IN MY OPINION HAVE BEEN LIVING VERY WELL COMPARE TO OTHER COUNTRIES(THIRD WORLDS)THANKS TO OUR FORE FATHERS WHO GAVE US THE HEAD START.  NOW ITS STARTING TO SEEM LIKE THE REST OF THE WORLD IS SLOWY CATCHING UP TO OUR LIFE STYLE BECAUSE WE ARE NOT ACCHIVING THAT SUCCESS WE ONCE DID.  A BIG PART OF THIS PROBLEM CAN BE BLAME ON OUR GOVERNMENT FOR NOT USING THIS HEAD START ADVANTAGE TO PROTECT ITS PEOPLE.  HOW YOU MAY ASK?  WELL WITHOUT GOING INTO TO MUCH DETAILS, THEY SHOULD OF HAVE MORE CONTROLS OVER BIG COMPANIES LONG TIME AGO BECAUSE THEY ARE THE MAIN TOOLS TO PROVIDE A COUNTRY'S WEALTH.  FOR EXAMPLE, IN MY OPINION, TAKE THE TROUBLE CAR INDUSTRIES FOR INSTANCE, FOR THESE COMPANY TO SURVIVE IN THE FUTURE, THE GOVERNMENT NEEDS TO JUMP IN AND CONTROL WAGES.  FROM CEOS TO ASSAMBLY WORKERS.  THIS WILL MAKE OUR PRODUCTS CHEAPER MEANING MORE SALES TO OTHER COUNTRIES.  NOW THE GOVERNMENT OF COURSE HAVE TO THEN LOWER ITS PEOPLE SPENDINGS IN FOOD, CLOTHINGS AND OTHER LIFE'S NECCESSITIES COSTS.  THIS SITUATION THAT WE HAVE CREATED WILL NOT END SOON AND WILL STAY FOR AWHILE.  WE ALL NEED TO STAND STRONG AND TAKES THE HITS THAT WILL COME.  UNITED WE STAND, DIVIDED WE'LL FALL.

Then you have these ridiculously loaded lending institutions like Bank Of America who REFUSE to keep payroll going after getting over 20 billion dollars in bail out money ALREADY TO DO JUST THAT.  Bank of America is responsible for the closure of Republic Windows &  Doors in Chicago laying off another 200 employees.  They get so overextended, commercialize themselves, take on too many bad loans and go to the Gov't asking for money.  And why?  To unfreeze credit and keep jobs in place and keep the economy moving forward.  Then, oops, sorry 200 workers, your sales and production are down slightly, so YOU'RE FIRED!  Refuse to help Republic Windows & Doors to make payroll.  I believe that some of these lenders and some of the people responsible for this should be thrown in PRISON!  It's sick.  Bank of America is one of the more corrupt institutions out there.  Good job guys.  Merry Christmas to several workers while you're going to retreat to the Hamptons!

The government should bail out the consumers and not the companies. If AIG, Citigroup... gets the money all loans from them should be forgiven to the consumers. If the government should bail out the consumers ans not companies that would get America aka USA out of the toilet. Example: give every legal AMERICAN that has paid taxes at least 7 years a 50,000 to pay off their debts, then when taxes are due send the reciepts with your next tax return and do not tax the people that have been paying into the bailout money forever ( or so it seems) then Legal USA citizens could use their paychecks to BUY!!! If you are already on the givernment dime you do not need additional government hand outs. get off your duff, quit complaining and do your part to turn the country around. I am sorry to say Obama will not do it and neither coulf McCain they have stepped into the biggest pile of doo ever created. The people that pull seven figure salaries need to go. There should be a cap. I really do not care if you have saved your company a billion/trillion dollars that is the job you were paid for. Incentives should be given to the people that actually do the work and can not claim credit for it due to dirty bosses. Bail out consumers and not cars builders,banks and insurance bail out the taxpayer. It is after all our money you are flushing down the toilet after all.

What's in your wallet? Capital one is a poison Credit card. They charge a late fee that puts you over the limit and charge you for that and ask for a minimum that you could keep paying over the limit fees the folks have chaged me over $240 in the last 3 months. Also GE Money reduced my creidt limit because i have an issue with Citifinancial which are also crooks. If you have a chance close at least those three and double pay them and get them off your behind. Chase credit cards seem ok at least they give you a days grace. If it's in the mail and arrives 1 day late they do not seem to charge. forget 2010 for the government to step in. We need to step up and close the terror credit card companies down.

Also tell me this how is it a law to swith to High Def television and we can not close our borders and make sure people with :working visas: go back home.

Another thought is that with all of the illegal people in the country working for CASH, know what they do with it? Wire it home thus depleting USA's reserves. Think on that

Were Doomed I say....

.............................DOOOOOOOMED!!!

Hang on to your rear end.... if that has not had taken from you yet?

Knock,knock.....anybody home. I guess nobody can reach an ellite group of people we call government If you don't change the way you look at things (US GOVERNMENT) the things you look at will not change. To throw money at a problem like this shows us how wise you people really are...not very.The World Bank(a Private Bank) has alot to do with whatts going on. AIG,Citybank, Bank of America,J.P. MORGAN/CHASE and a few other banks are shirttail relatives to the Federal Reserve(WORLD BANK). Much of this bailout money has gone back to the group that helped creat this mess....creating debt(SLAVES OF MONEY ) for the present and future generations of US citizens. I guarantee you this arangement  will not work. Has this country changed how we do business....no! I learned also President BUSH'S grandfather was an executive of the World  Bank.... Greed has ruled! THAT IS THE PROBLEM.

THE ONLY REAL AMERICANS WERE ARE FORFATHERS, THEY SET IT ALL UP FOR US TO BE A PROSPEROUSE COUNTRY WITH THE AMERICAN DREAM, I DON’T REMEMBER READING IN THE COSTITUTIONION. “ FOR  THE GOVERNMENT BY THYE GOVERNMENT” OR “AMERICANS PERSUE YOUR DREAMS BY STEALING, CHEATING, FRAUD AND HIDING”. I WILL SAY THIS. LET THE PEOPLE DECIDE WHO GETS OUR MONEY AND HOW IT WILL BE PAID BACK TO US. IF THE TRUETH BE TOLD FROM THE FINANCIAL INSTITUTIONS, ON WHY THEY ARE IN TROUBLE, THE SAME REASONS WOULD COME TO THE SURFACE AS TO WHY AVERAGE AMERICANS GO UNDER. LITTERALLY BILLIONS OF AMERICANS GO UNDER EVERYDAY AND NO BANKING INSTITUTION WOULD EVEN CONSIDER LENDING MONEY TO A HOUSEHOULD FAMILY THAT WAS ON THE VERGE OF BAKRUPTCY. I WOUNDER IF ALL AMERICANS FILED BANRUPTY ON THE LENDING INSTITUTIONS, IF THEY WOULD STILL NEED BILLIONS OF DOLLARS?

History is where it is at my fellow Americans. This had all got started in the Reagan years. though I think R. Reagan was a fair president and a good and decent man, he was able to persuade a lot of us that we need governent to get out of peoples lives and businesses activities. The laxing of government regulation and let "free markets" dictate how we conduct ourselves (quasi-libertarian view). In essence let economics (free markets run rampant or should I say "rabid") and economic activity trump our governance as a state. Pair this with the still maintained religion of the Republican (maybe their far right side), supply side economic theory via lower taxes on the "better to do people" in the HOPE that they will invest in creating businesses, investing in people (hiring), investing in equipment/supplies etc....Guess what they didn't do it. They kept the cash and bought another houses (or houses - real estate is never a bad investment) and just bought stock equities (which by the way America you buy stocks from investment brokerage houses you are not buying from the company - but that is a diatribe for another day...Stay tuned). Think back to the stock market run up of the mid-80's which was corrected in Oct '87. This general "group think" was carried on through Bush I, Willie Clinton, and Bush II (oh W whatever happened to your compassionate conservatism you espoused in 1999 and 2000). And is still very much alive this day. Added to this is that our country (again capital formation based) in an effort to create capital, wealth chased cheap labor to acutally manufacture goods (death of manufacturing in the US) and become a "service based, information based economy. Oh Please..... read Freidman's The World is Flat", same sad story...business chasing cheaper costs of business to make a couple of thousand people happy (investors, those who already have wealth, mutual fund companies, hedge funds, wall street brokerages).

Our economy is its own worst enemy, Marx said that free market capitalism will fail because it will feed off itself and die. Not that socialism is any better system either - as history has proved, but we might be seeing some of the symptoms that K. Marx was referring to. Those who have been the economic power in this country are have been the "kings" and "queens" for decades but apparently were not grateful enough that the Lord had blessed them with fortune and wealth which they should have shared (in the old days it was called "noblesse oblige"). They are positioning themselves to be the enemy, but the "funny thing" is they are killing us slowly with our money via the government - who they don't want to be meddling in their business. Not being able to follow the money for some of these banks who have already taken it and did whatever with it is more certain proving characteristic. May God bless us and help us, bless us one and all....

This is what lethargy gets us.  Go to sleep at the switch and your are doomed.  This is only the beginning folks.  Those in Washington could care less about you.  You think Washington will take care of you?  Look around, they certainly are!

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