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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

 

Rewarding the huge companies that have mismanged there assets and disregarding middle Amercia -  the very backs that they rode on to be so huge in the first place is not surprising, given past history.

We need to take back our country and our rights as the citizens of this country. Demand better compensation and a bigger share of profits when companies do make money. I'm so tired of CEO's there cronies making 400 times the amount of average workers.  

Not until "We the People" find the courage to stand up and say, enough is enough will the insanity stop. Enough of rewarding the Snidley Whiplashes in this country. The American children and general public are being tied to the train tracks. If we can say No to disease, No to hunger, No to animal cruelty, and No to almost every other noble cause ... why then can we not stand together and just say No to the tax wasting government and corporate toxic leaches sucking the life from our beloved nation.    

my husband works for GM ......no bonus in 10 years  .....it would take him  30 years  to make...what  the big CEO's  make in  one year !!!!!!!!!!!!!!!!!!!!!!!!!!!   sad  that  the lil people  like us have to be going thru  this Thanks to the RICH !

General Motors, Ford, and Chrysler should be a model for the future.  The people who work for these companies should not only lose their jobs, every one of them, not just management,  should be ashamed of themselves for building garbage and stealing our money.  Never forget that you don't just lose money, someone took it and spent it.  Bailing out banks and giant companies with the idea that they are too big to fail is the most ridiculous idea I have ever heard of. No one offered to bail me out or even extend my credit when I lost my business in the last recession.  If the taxpayers pay for this stuff we should OWN this stuff at the end of the day.  If I stop paying my mortgage, can I keep my house?

We have been duped! Our own Government has used our lazy society to it's advantage, how you may ask, by not educating the American public on any of it. Where were the infomercials, the websites to visit, the radio or the television? I agree with the Dudley comment it is time to take a stand and take back our country; say no to big government, and let these businessess that raped the working- class man fail!  If we the people do nothing, this government will do everything to spend our hard earned money on nothing but thier own greed and corruption.

ya Ann and how much money does your husband earn hourly at GM, you and your husband are just as greedy as the CEOS!

It is unfortunate that the bail out again helps only rich gamblers at the cost of the average hard working american. Great MBA graduates from Great Schools discounted (Accounted) the future eanrings into today andintorduced so many new products and services with so many assumtions on futures. Bailout should have first restored the money lost by average americans on their retirement accounts for a limit and then should have gone to help out the financial institutions

...just amazed how dumb people really are, if these companies failed and go under, millions of jobs will be lost, which will trigger another wave of job cut, then another wave. 10 millions people are already jobless, imagine another tens of million unemployment. It is not that our government want to bailout these companies, they just dont know what else to do to secure these jobs.If millions of Americans lost their job, it'll not only cause another major economic problem but also social problems.

and by the way, everyone is greedy about something, so don't even talk about other's greediness.

these suckers should have gone bankrupt and can kiss the tapayers asses if they need the $$$$ for bail outs ..

The top 400 families in this country will end up with most of the bailout money.  Bank owners and truly major stock holders in major corporations and many of our well positioned political members and Paulson, Bernake, Kash Kari President Bush past vice president Dan Quayle major Ford stock owner should all recieve several biullion apiece.  Its division of the riches before meltdown.

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