Posted by: tristar3research | February 9, 2009

$9.7 TRILLION Bailout Cost??

Absurd that the extent of the explosion in future debt burden is this high. Where is the oversight? Has anyone really heard where this fiat  money has gone? Bloomberg explains:

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed.
But it takes a plain speaker from North Dakota to really lay out this disaster: “We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

Of course, some other plainspeakers are also seeing disturbing reality: “A problem that was created by building up of too much debt will not be solved with yet more debt,” South Carolina Governor  Mark Sanford said Sunday, making a reference to the federal deficit spending that will likely finance the federal stimulus package. “We’re moving precipitously close to what I would call a savior-based economy,” Sanford also said Sunday on CNN’s State of the Union. The South Carolina Republican said such an economy is “what you see in Russia or Venezuela or Zimbabwe or places like that where it matters not how good your product is to the consumer but what your political connection is to those in power.  That is quite different than a market-based economy where some rise and some fall but there’s a consequence to making a stupid decision,” Sanford said after pointing to the powers granted to the Treasury Department and the Federal Reserve to help deal with the current economic crisis.

And, the punchline:

“A lot of people who’ve made some very stupid decisions are being bailed out by the population at large,” he added.

And, notwithstanding that, Fed chairman Bernanke has no consensus for the program anyway!


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