CNBC– Given the speed at which the federal government is throwing money at the financial crisis, the average taxpayer, never mind member of Congress, might not be faulted for losing track.
CNBC, however, has been paying very close attention and keeping a running tally of actual spending as well as the commitments involved. Try $4.28 trillion dollars. That’s $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources*. Not only is it a astronomical amount of money, its’ a complicated cocktail of budgeted dollars, actual spending,
guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and new releases. Strictly speaking, not every cent is directed a result of what’s called the financial crisis, but it arguably related to it.
Some 68-percent of the sum falls under the Federal Reserve’s umbrella, while another 16 percent is the under the Treasury Asset Relief Program, TARP, as defined under the Emergency Economic Stabilization Act, signed into law in early October.
(The TARP alone is bigger than virtually any other US government endeavor dating back to the Louisiana Purchase.)
Is there any light at the end of this long tunnel? See the breakdown of recipients here.
Found by Ian Warner.
# 16 LibertyLover said, “The government got them into this mess to start with! You don’t solve a liquidity problem by devaluing your money. ”
Well, here’s the story. The gov needs way more revenue into the Treas. Obama needs to go back on his no taxes promise without looking like he’s doing just that.
Solution? Hyperinflation followed by wage inflation.
Result: “Middle Class” wage earners bumped into “rich” category & all pushed into higher tax brackets thus having to give gov’t higher % of earnings.
#29, That package was approved 385-35 in the House and by a large majority in the Senate.
It wasn’t the republicans’ fault alone. A piss-away, yes, but one both sides of the aisle are responsible for.
And the dems are planning a second one. Puh-lease! The first one didn’t work so why would anyone think a second one will?
Doing something wrong just to look like you are doing something is still wrong.
My congressman voted against the bailout. I am angry about that it passed anyway. Now we are going to bail out Ford, GM, and Chrysler to make them as cost effective as Amtrack. (irony)
What other companies are too big to fail: Starbucks, Circuit City, the music industry?
Some people are blaming the Republicans for this and other people are blaming the Democrats. There is plenty of blame to go around. I want to see people in Prison. This means Paulson, Bernanky, Barney Frank, and everyone weasel who voted for this bail out.
There is not enough space in the prisons, so we might have to release 535 drug addicts or rapist to make room in the prisons, but who is more dangerous: a drug addict or a congressman?
I hope Obama reverses all this when he takes office and that he can clean up this mess. It’s only hope. I doubt he will change the situation.
#31 So you agree with me it was piss-way! Good.
While republicans like to share the blame when their ideas go bust, I also agree this was a bipartisan vote. Like who wants to tell their constituents they voted against Bush’s money giveaway? Right.
Where we disagree is that this $25B is for a specific cause, to address a specific and clear objective. Since you and the rest are uninformed of the ramifications of the auto industry going bust, you resort would naturally resort to calling it another waste of money. Gee, how fiscally hawkish of you republicans now after 8 years of fucking things up.
You must die
#33, I’m not a republican. I’m a Libertarian. If you could see past the end of your nose, you would realize that the major part of this problem is the two-party system. Think outside the box for a change.
And just FYI: I am opposed to ANY taxpayer money going to support ANY private enterprise.
You should read a book called, “Free to Choose.”
# 34 LibertyLover
Don’t waster your breath. Most on this blog have fallen for the Int bankers long term scam.
#34. OK. I’ll take your word you are not another republican hiding under another banner.Fair enough.
As far as your “..since the two party system sucks I will ignore reality and bury my head i the sand..” philosophy goes, you have a right to not take part in the solution. All I ask is that you STFU up and let those of us living in the real world discuss real world problems.
# 36 Dallas said, “All I ask is that you STFU up and let those of us living in the real world discuss real world problems.”
Since you haven’t a clue what the actual “problem” is, how will you discuss it much less address it?
#37 I do believe I know what the problem is. It’s all over the news so you might want to stop blogging every 5 minutes and get informed. The economy is in the toilet and the number one issue.
My plans on “discussing and addressing it” is to help inform the average Joe that chooses to get their news from Dvorak.com in the following areas:
> Convey the gravity of the economic situation
> How Obama has a plan that needs your support
> How the Dem plan works and how the Repub plan does not and has not and why
As far as the the Liberty conversation goes, my point was that complaining about the 2 party system is terrific and I agree, but this does not solve the problems in front of us.
It’s like when a building is on fire and the debate centers on whether the building should have been built with four floors or five. It don’t matter now. The fire needs to be put out.
# 38 Dallas said, “#37 I do believe I know what the problem is. It’s all over the news so you might want to stop blogging every 5 minutes and get informed. The economy is in the toilet and the number one issue.”
You’ve stated a symptom of the problem. Not the problem itself.
It’s like saying the car doesn’t go fast as being the problem. That is a symptom. The actual problem could be that the fuel is the incorrect type.
So, do you have a clue as to what the actual problem is?
#36, All I ask is that you STFU
I love it when people get so nasty on blogs. Not having to look the other guy in the eye is worth a whole can of courage.
Admitting there is a problem is the first step toward recovery. However, your ideas on the solution will only dig us further in the hole. A bailout is not the answer. Nationalization of the financial system is not the answer. Socialization is not the answer.
You want the answer? Read a book called, “Free to Choose.”
#40 LibertyLover:
Yes, his macroeconomic policy, Monetarism, is excellent and the only way to go. It is tough to pull off without the gov’t being in control of the money supply though.
#40. OK. I will read the book and apologize for STFU. In fact I read Milton Friedman’s ‘Wealth of Nations” as part of my MBA program and appreciate reference to his new book although I thought Friedman was dead.
Back to this issue at hand. My problem I have with the “don’t do that and don’t do that either” crowd is that you provide no solutions. Doing nothing is not an option. Sorry. Letting the current conditions deteriorate on purpose with the ‘hope’ of a better tomorrow doesn’t hunt. $25B to bail out what is arguably 10% of the US economy appears cheap to me in comparison to what has already been pissed away by Bush and the overall $700B bailout package.
I’ll read the book. In turn, what exactly do you propose other than ‘don’t do anything’ in this crisis? What is your rationalization of depriving this one hinge industry of less than 5% of the $700B already allocated?
#43 My error on Wealth of Nation. I’m looking at it and it was Adam Smith, not Friedman.
#41, That should have been directed at #37. Oops.
And on top of this massive fraud, now we find that Gulf War illness is real, and they have been telling all of those soldiers that they were crazy and denying them benefits all to cover it up. Bear in mind that by some estimates this disorder has killed, or will kill, more than 100k people; far more than died in the Vietnam war. Not to mention the suicides that arose solely from suffering terribly, and being told that they were crazy for it.
How many of them died in the streets because they could get no coverage? And now they rob us blind and tell us to like it?!
We are being led by monsters.
And on top of this massive fraud, now we find that Gulf War illness is real, and they have been telling all of those soldiers that they were crazy and denying them benefits all to cover it up. Bear in mind that by some estimates this disorder has killed, or will kill, more than 100k people; far more than died in the Vietnam war. Not to mention the suicides that arose solely from suffering terribly, and being told that they were crazy for it.
How many of them died in the streets because they could get no coverage? And now they rob us blind and tell us to like it?!
Truly we are being led by monsters.
Oh, here is the link:
http://tinyurl.com/igetnospam
#45. You’ve cost me $14.95 cents but I’m sure well worth it. I purchased Friedman’s audio book “Free to Choose” on iTunes. As I read through the front and back cover pictures, it should be a great philosophical reading.
However, I go back to the topic of taking actionable and immediate measures on today’s economic problems, I doubt very much the book has answers. Once the fire is put out, I am sure we would agree much on the philosophy moving forward.
I will read the book and apologize for STFU
Accepted.
’ll read the book. In turn, what exactly do you propose other than ‘don’t do anything’ in this crisis?
Unfortunately, there isn’t just one thing that will solve the problem. There are so many bad decisions that have stacked up on top of each other over the last 75 years that it is going to take too much to unravel with the single stroke of a pen.
However, the last part of “Free to Choose” describes a plan of action. If I had to describe that plan in one sentence, I couldn’t.
What is your rationalization of depriving this one hinge industry of less than 5% of the $700B already allocated?
It’s another bad decision.
For instance, we’ve artificially kept the price of steel high to keep our steelworkers employed. The unintended consequences of this is our industries (including the Big 3) have to buy the steel at that higher price. This is just ONE instance Adam Smith’s invisible hand in action.
What unintended consequence is going to arise by bailing them out? People still aren’t buying their cars because of the credit crunch so what good is it going to do anyway?
#49, You’ve cost me $14.95 cents but I’m sure well worth it.
🙂
#50 As they say in my company, we’ll just agree to disagree. As you are concerned by unspecified ‘unintended consequences’ of a bailout, I am concerned about specific domino effect consequences on NOT bailing them out.
“.. People still aren’t buying their cars because of the credit crunch so what good is it going to do anyway?..”
I am following this carefully (link below). You would disagree but based on what I’ve learned, I feel the auto industry has a get5 well plan and it is compelling enough to help them through this tough cycle. The retooling of the auto industry is well on it’s way and this capital markets crisis right now is killing them. To me it is unconscionable to allow 10% of the American economy falter and pour 100’s of thousands of new workers into the unemployment lines.
http://money.cnn.com/2008/11/18/news/companies/detroit_faq/index.htm?postversion=2008111804
#52, To me it is unconscionable to allow 10% of the American economy falter and pour 100’s of thousands of new workers into the unemployment lines.
And that is the crux of the problem. You are talking about putting 100,000’s of people on welfare in the hopes the industry will recover. You are, in effect, sending the wrong signal to the market and devaluing the dollar at the same time.
If they’ll be out of money by 2009, they can just as easily drop their prices. With lower prices, they’ll should be able to sell more. If they sell more, this will stretch the lean time out.
A bailout gives them no incentive to be competitive — it’ll be business as usual.
Bankruptcy is the best option. Let someone buy them, cut the fat, and be on their way.
According to the BIS, the notional amounts outstanding and gross market values for derivatives in June 2008 (total contracts) is 683,725 billions of US dollars. This is 683 725 000 millions or 683 725 000 000 000 US dollars.
This is 10x the GDP of the world… Or 3x the total infrastructure of the whole planet…
Wait until they try to bail this out.
The only solution is to bankrupt those speculators and protect the real economy.
#54 WTF!
Can you give more info on your sources and what does that astounding total represent? Crumps, sure is gonna be a blue Christmas. ;(
Cast the merchants from the temple! As long as the US government is more strongly influenced by private interests than the welfare of it’s citizens, things like this ‘Bailout’ will continue to occur. While it’s a utopia to think that the influence of private interests can be eradicated, some kind of legislation should be passed to control this. Watching all those congressman scrambling to get their ‘pork’ when the bill was to be passed really made me sick. This system of government has got some very serious failings and it’s just getting worse. Soon we’ll be seeing massive demonstration marches on Washington and with luck maybe somebody’ll do something to help the nation quit hemmoraging money, or not.
#50, Liberty Lover,
Unfortunately, there isn’t just one thing that will solve the problem. There are so many bad decisions that have stacked up on top of each other over the last 75 years that it is going to take too much to unravel with the single stroke of a pen.
So, although all other ideas are bad, you don’t have one yourself. You want to quote Milton Friedman. Why not Heinrich Himmler? They were on the same wavelength.
You can’t continue with the “bad decisions” answer. Now is the time to put up or shut up. Maybe you don’t realize it, but the whole world is about to fall into the worst depression imaginable. And fuk anyone that thinks that would be a good thing.
Should some people go to jail? Of course. Should they be stripped of all their property? A resounding yes. Does this list include some politicians as well as financial institutional leaders? Another huge yes.
A bailout might not be the best solution or even a favorable one. Unfortunately, there is too much at stake here. I can’t answer for you, but there are just too many people that will be hurt other wise. They aren’t the “Captains” of industry either; they are the little people that live from their small paycheck to the next small paycheck.
#57, You’re right, of course. Saying everything is bad and then not proposing anything in its place is not the “solution.”
However, what I am saying is “bad” is the bailout. You say bailing out these companies is better than doing nothing. I disagree. By bailing out these companies you are affecting the bottom line of every single person in this country. You are reducing their buying power by increasing the amount of money in circulation. People talk about debt and deficits and the like. Very rarely do people talk about the amount of money in circulation. If your money supply outstrips your production, your buying power gets reduced. You want to put more money in people’s pockets? Stop loaning/giving the money to these companies. Where is this money coming from and what increase in production justifies its existence?
That is why I am no vehemently opposed to this bailout and anything resembling it.
So, what should we do? #56 has a good start. Special interests are destroying this country. If a politician promises to support just 10 special interest groups, he can win every time. Sure, each special interest only wants a small piece of the pie, but take all the special interests together and you have the whole pie. They slice it up and there is nothing left for anyone else. The federal bureaucracy, most of the time, is working against itself.
Example: You have one agency trying to keep the price of corn up so farmers can stay in business — they do this buy paying them NOT to grow corn and imposing tariffs on any imports. Across the street, you have another agency trying to get the farmers to grow corn to we can develop alternative energy. This is STUPID!! Both of these agencies were formed due to special interests buying off politicians.
The government has gotten too large. We need to remove the incentive special interests pose to the politicians.
This is supposed to be a “rule of law” country, yet in order to get anything done, you deal with regulations. We have laws that give pols the power to create a new regulation, bypassing the legislature altogether, that is treated as a law. You think this isn’t the case? Sit across from an IRS auditor. The law is the last thing you are worried about. You are worried if his coffee is still hot enough. This needs to be stopped. We are not a “rule by men” country.
Example: The state I live in has a law on the books that states if you sell MSAccess to a customer and then use that MSAccess to create a database, you only collect the tax for the state based on the software sale. The state comptroller “reinterpretted” that law to say just the opposite (right after the dotcom bust when state revenues dropped). Sure, I could fight it but how much would it cost me in court to do so? It is just easier for me to charge my customers the tax and send it in. This is what the state hopes I’ll do. Note: There is currently a $3M suit that’s been pending for over 5 years on this exact issue because the judge doesn’t want to piss off his political allies at the state and yet he doesn’t want to have his judgement overturned on appeal. So, he is sitting on his decision.
When our government agencies are so screwed up that they are working against each other in this fashion, we need to look at exactly what we are doing wrong.
The bailout is not the answer. We need to step back and think about what caused this problem in the first place. Yes, everybody has their pet reasons. The ironic part of that last statement is everybody is right — it was the lax regulations on the part of the repubs and the requirement to make ninja loans on the part of the dems. Argue all you want for one side or the other, but those two situations — diametrically opposed to each other — is a major cause of the problem.
How many more things can I come up with? This blog isn’t big enough.
Here’s another example of what I was describing in #58:
http://tinyurl.com/66zx9k
On one hand we have an agency whose job it is to keep drugs off the market fighting with another agency whose job it is to get the drugs out there.
If they haven’t gotten figured out in 46 years, they’re not going to. One or the other has got to go — preferably both.