Thread: Total 2008 Bailouts Actually $8.5 Trillion

The Real Cost of the 2008 Recession 12/9/08
By Olivier Garret, CEO,
The Casey Report, www.caseyresearch.com

It took the statisticians of the National Bureau of Economic Research almost a year to confirm what the rest of us already knew, that the US registered a significant decline in economic activity, thus officially entering a period of recession. While I am pleased that the members of NBER take their duties seriously, thereby ensuring that they don’t leap to any hasty conclusions, I only wish that similar moderation could be displayed by their colleagues at the Fed and the Treasury.

Unfortunately, the facts prove otherwise. Three months before the recession was officially declared, Paulson and Bernanke have embarked on the largest bailout program ever conceived with the blessing of a lame-duck president and a complicit Congress - a program which so far will cost taxpayers $8.5 trillion. This staggering sum encompasses: loans backed by worthless assets ($2.3T), equity investments in bankrupt companies with negative net worth ($3.0T), and guarantees on crumbling derivatives and other hollow collateral ($3.2T).



Back in September I was stunned that Paulson was able to make his case and win the support of Congress for a $700 billion bailout package (more than the total war spending in Iraq to date).

How could Americans (or more accurately, their representatives) agree to give such a broad mandate with so few checks and balances? Have we become completely numb?

While I realize that many of our compatriots have been running large credit card balances and interest-only mortgages with little thought as to how they would repay their debt, one would expect a little more restraint when dealing with the financial future of the largest economy in the world.

Operating under the assumption that our largest financial institutions are “too big to failâ€

I read yesterday that the trillions being given to Paulson's friends in the banking industry, are actually being used to suck up smaller banks more millions going to executive compensation. Of course, there is no oversight, they are free to blow your money any way they see fit.

They could have disbursed that money back to the taxpayers, and you would have seen car sales increase, retail sales up, etc. , instead of throwing it at the sharks in the banking industry. The banks get $7 trillion for mismanagment... we get a stimulus check of $500. for proper management.