By Tim Cavanaugh
The Federal Deposit Insurance Corporation says total government financial assistance came to nearly $14 trillion as of the end of the the first quarter. In its Summer 2009 Supervisory Insights [pdf], the FDIC practically swoons in describing the largesse:
One indicator of the gravity of recent developments is this: in 2008, U.S. financial regulatory agencies extended $6.8 trillion in temporary loans, liability guarantees and asset guarantees in support of financial services. By the end of the first quarter of 2009, the maximum capacity of new government financial support programs in place, or announced, exceeded $13 trillion (see Table 1). The need for emergency government assistance of such magnitude has triggered wide-ranging reassessments of financial sector regulation.
The FDIC is being too modest in that description. The maximum capacity of support programs announced through March (in billions) comes to $13,903. (That's an outlay, so debt service on that figure means the actual cost to our post-human descendants will be much higher, right? Anybody? Buehler?) Go to page 4 of the document, or check out the handy charts here and here, to see where it's all going -- and that "all" includes $700 billion in Troubled Asset Relief Program funds that are supposedly no longer needed. Note that there is no plan in the works to put repaid TARP funding back in the treasury or give it back to the people. Mild-mannered Mish Shedlock goes ape:
I have a request for Geithner and Bernanke: Tell the truth or shut up.
Both Geithner and Bernanke maintain that banks are well capitalized. Indeed many banks are returning TARP funds. However, if banks are well capitalized then why not cancel the remaining $7 Trillion of this taxpayer ripoff right now? Pray tell, what's the need to go ahead with the PPIP?
Ben and Tim, please stop saying that taxpayers will not lose money on these schemes. You know, I know and the whole world knows that is a preposterous lie. Please come out and say you really do not give a damn about taxpayers because we all know that you don't. This is a taxpayer sponsored bank bailout, no more no less.
If you cannot give an honest assessment (and the whole world knows you can't), then please stop your disgusting, phony charades and fake transparency efforts.
It's important to keep track of individual misappropriations like that, but given the size of the figure itself, my question is this: Is there any economic scenario optimistic enough to admit the possibility that this money will be paid off during the remaining life of the United States of America?
By Tim Cavanaugh