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

 

The revolution needs to involve all young people to get involved in there local government, start sowing the seeds now for a responsible government to foster responsible corporations.  We need good people to fill washington to make the right decisions to govern the way which fosters responsibility, all young people need to care and be interested because it is ultimately our futures.  This mess will take a long time to recover from but utimately we will and we are still the best country in the world!! Second to none..don't ever forget that

The day of our grandparents world is over, the ww2 generation is dying and soon will be gone the voice of the depression that warned us not to spend too much because they watched their parents loose their homes and stand in soup lines, the glory of FDR's orginal plan gone, he never intended people to receive a check without working for it but the wel-fare system and coporate bail outs have prostitued our economy to the wrong people. The average joe and jane are the forgotten the tax payer that keeps their noses clean. Our education is on the bottom rung in the modern world, we forget our history or try to forget it. We have created a country of brat's hand outs at the top and hand outs at the bottom. Would the Ceo of citi bank shovel crap if he had too? Would welfare mom that has spent her whole life in the system shovel crap if she had too? Probably not they want their checks your money let's give more money to the Walton's they don't have enough, more money to Citi bank and every other multi-billion dollar industries that take jobs from the american under free trade, let's not care where your tax dollars are going but, wonder why the Irs knocks on your door if you don't file taxes on time or you missed something when you file let them through you in jail for $2000.00 go goverment

I think the time is arriving when the American taxpayer will say enough is enough.  I'm disappointed that representatives of both parties remain silent while the Fed covers the losses of the big banks and investment houses.  Let the market system work.  The FED is only prolonging the inevitable and spreading the pain from 18 to 24 months to 24 years.  The American people can withstand anything if everyone is being treated equitably.    

...........and we can't even stage a tax revolt. The crooks take it out of our checks without our permission before we can lay a hand on our cash. If there was a form to decline to have any taxes withheld from our checks you can bet every hard working person that has been responsible would sigh it.

Unfortunately, the name of the game for the bailed-out executives is to make as much money for themselves as possible, regardless of how it screws the rest of the world over.

I personally feel the executives with performance-based pay should all be bankrupted and forced into indentured servitude as the price of the government saving their companies... but I'm sure they would rather walk away from the company with millions of dollars in the bank, and never again have to think about the company, instead.

Gov. special interest (Poulson-GS) and know it all punk finance losers-go away. It is simple folks. Gaurentee low interest loans for credit worthy, new home buyers...let all those who are caught up in and responsible for the financial mess die of natural causes...RIP

I'm neither rich nor a banker, but this whole article is pure propaganda and is basically a lie. It directly implies (no, it STATES)  that this amount is "spent" and is "given" to bankers and whoever. This is a lie. If you buy stocks or bonds (loans), no one asks "Why did you give your money away?" Somehow the media, and this journalist in particular, thinks this is the case if the government buys stock or makes loans (but not if you do it). Actually, they don't really think this, they're just saying it to get ratings--i.e. getting you all to rant and rave as you have. So it's the same amount of responsibility for truth as in the movie "Network". This is the reason I've modified the old lawyer joke: "What's a 100 lawyers, politicians, and journalists at the bottom of the ocean?" (A good start.)

Is there an in-formation leak in the next administrations economic policy planning or are we just being informed unofficially by the wall? If we were still trading in the exchange currency of the pilgrims and indians, how many peas and beads are we talking about in real kind?  What is going on with Russia and China?  I understand they are doing a lot of currency trading in their respective  currencies! Maybe the big three could trade vehicles for oil?  Bailout Wagons, "BW"s are available in Detroit.

ed's got it right. i rember the rantings of der shickelgruber very well

This is to sick of it..It is appparent you are still employed and has never went through a tough time or been downsized. Well it happens $60,000 in retirement gone because my husband was down sized we had to blow through everything to keep our heads above water and not get a goverment check. There were times we fell behind on the mortgage because we didn't have money but we still managed to make the payments our credit score is low and we cannot refinance the house because we were late on payments and the penalties your charged for dipping into a retirement are huge.

Do you know anyone that has gotten sick? I do 65year old electrition has heart attack credit perfect before that 40years in a union caps out his insurance and owes $400,000 in medical bill and had to file bankruptcy. He can't get a loan good tax payer hard worker his whole entire life and can't get a loan because he got sick. Don't get sick if you do don't own anything because you will loose everything, if you don't own anything they can't take it and if you do own anything you better hope you die quickly without illness because life insurance will pay and maybe you can leave something to your family. That is the American middle class reality. We have serious issues across the board that affect mostly the working class people of this country the ones that have paid their mortgages on time and their bills on time and lived with in their means only to loose everything because of a job loss or sickness,30years ago someone from wall street did'nt tell these men and woman hey give me your money I'll plunder your retirement take your money make my $20million dollars a year give my employee's outrages bounses and after I do that I'll beg Congress to bail me out with your tax money and if they go bankrupt your might not get your social security because I'm a creepy selfish human bottom feeder at the top of the food chain. If that guy said that every american would have a back yard of coffee cans full of coins and cash and least they would have had something to fall back on. Oh I received a letter the other day on my retirement account we spent my husbands retirement not mine, the letter pretty much said maybe or maybe not be there hope the market bounces back. Thanks for your business.

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