Bailout Price Tag $3.5 Trillion So Far

From Yahoo Finance:

government-reacts-to-home-forclosuresWhile the government is clearly spending a lot of taxpayers’ money to bail out financial firms, the tally is even bigger than most Americans (economists and pundits included) are probably aware or willing to admit.

The bailout bonanza has gotten so big and happened so fast it’s the true cost often gets lost in the discussion. Maybe Hank Paulson and Ben Bernanke prefer it that way because the tally so far is nearly $3.5 trillion, and that’s before a likely handout for the auto industry.

Yes, $3.45 trillion has already been spent, as Bailoutsleuth.com details:

  • $2T Emergency Fed Loans (the ones the Fed won’t discuss)
  • $700B TARP (designed to buy bad debt, the fund is rapidly transforming as we’ll discuss in an upcoming segment)
  • $300B Hope Now (the government’s year-old attempt at mortgage workouts)
  • $200B Fannie/Freddie
  • $140B Tax Breaks for Banks
  • $110B: AIG (with it’s new deal this week, the big insurer got $40B of TARP money, plus $110B in other relief)

Tallying up the “true” cost of the bailout is difficult, and won’t be known for months if not years. But considering $3.5 trillion is about 25% of the U.S. economy ($13.8 trillion in 2007) and the U.S. deficit may hit $1 trillion in fiscal 2009, hyperinflation and/or sharply higher interest rates seem likely outcomes down the road.

[more] (A tip of the hat to my friend KMTZ for the link.)

Consider this: there are somewhere around 50.4 million outstanding (not-yet-paid-off) home mortgages in the US averaging $1,600/month payments (this includes taxes in escrow). If Congress had used the Bankster Bailout money for citizen mortgage relief, they could have made EVERYONE’S house payment for the next 43 months.

Think of it: no house payments for over 3 and one half years. Now that would be a benefit!

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