This is a WTF number:

“U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.

The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.

“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.

Costs include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs, he said.

Wow. Hard to believe . . .

>

Sources:
U.S. Rescue May Reach $23.7 Trillion, Barofsky Says
Dawn Kopecki and Catherine Dodge
Bloomberg, July 20 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM

SigTARP

http://www.sigtarp.gov/reports.shtml

Category: Bailouts

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

56 Responses to “Total Bailout Cost = $23.7 Trillion Dollars”

  1. super_trooper says:

    Maybe someone should write an instruction manual on how to “rob” a bank and get away with it.
    Why is nobody upset?

  2. Chtulu says:

    So… let me get this straight: Effectively, we’re handing money — right out of our paychecks — to current Bankster / Wall Street executives of the few firms left, so that they can solidify their domination of the U.S. portion of the world financial structure; and to ensure that several generations of future Little Banksters and future Little BSD’s can attend Choate and Andover; cruise through H/Y/P; marry well, and live soft, gentle, safe and comfortable lives — all while continuing to develop new methods of defrauding the ‘Little People’ who are increasingly reduced in their spending power or financial security.

    Or did I misunderstand?

  3. Pat G. says:

    I saw this number earlier on CNBC and like you I said WTF? And there is more debt that is going to be added to this number before it’s over I’m sure. Seems as though the U.S. taxpayer will be “on the hook” and an indentured servant for generations to come.

  4. DL says:

    I shudder to think of the cost of the cleanup after the NEXT bubble bursts.

  5. Onlooker from Troy says:

    And moral hazard has run absolutely wild. Everything in just about every market has been so unbalanced and distorted by Fed policy and govt subsidy and bailouts that we don’t even know which way is up anymore.

    Analysts spend as much or more time trying to figure out the next policy move or random law/govt subsidy as they do in understanding company/industry internals.

    It’s bad and getting worse.

  6. poly says:

    Regarding your “Spontaneous Crowd Chorus” post from the other day, here is a short video of it.

    http://www.youtube.com/watch?v=J5WahxLSLs8

    Sorry if it’s already been posted.

  7. super_trooper says:

    @ DL, if we ever get to see that, we’ll be one step close to the end of civilization.

  8. Onlooker from Troy says:

    Indeed, future generations won’t likely have much respect for current ones. The history books won’t be kind, for good reason.

  9. DeDude says:

    Then WTF are people complaining about the health care plan possibly adding 0.1 trillion per year to the deficit. At least that money will provide health insurance for 45 million people who doesn’t have it now.

  10. Bruce N Tennessee says:

    Since this is not nearly the limit, I am not worried. Call me when we get to googolplex territory….

    Fiscal conservatives alas, this is our last generation. We go to our just desserts…where calculators are banned, and only pencils and legal pads abound. Where an estimate is pretty close to the final number. Where women are pretty and politicians are all one-termers…

    Paradise…

  11. Mike in Nola says:

    And the market goes up.

  12. Scott Frew says:

    $23.7 trillion–there’s some money on the sidelines!

  13. Stuart says:

    A bigger WTF is why the US Treasury is still able to borrow at these low rates given this figure. Are lenders really that captured or really that ignorant of the risk of default?

  14. Bruce N Tennessee says:

    DeDude:

    You are well into the kool-aid. Even the chairman of the Governor’s conference this weekend, a democrat from Montana, says this is a shell game. Just because they move their lips, it don’t make it so…

    I saw a lady in the salt mine just a few minutes ago who has had the “good fortune” to have had care until 4 different socialized systems…(she’s originally from England)…let me say she is less than enthusiastic if this miasma of hellthcare upgrade passes…

  15. hue says:

    what’s a few trillions among friends.

    and who is this “sideline” guy with all the cash i keep hearing about.
    he has cash at S&P 666, and he still has cash at S&P 950, then who is buying all of this time?

  16. Bruce N Tennessee says:

    http://www.huffingtonpost.com/2009/07/19/obama-ally-throws-cold-wa_n_239869.html

    Obama Ally Throws Cold Water On Health Care

  17. Andy T says:

    That’s sounds like the right amount needed to counteract the forces of a $25-30 Trillion credit contraction….

  18. leftback says:

    $10T here, $10T there, = pretty soon you’re talking real money….

  19. ben22 says:

    That’s sounds like the right amount needed to counteract the forces of a $25-30 Trillion credit contraction….

    No, I don’t think it’s enough, this will be larger before all is said in done in the attempt to stop credit deflation. It’s going to fail but they will at least try.

  20. super_trooper says:

    @Bruce N Tennessee, that’s just pure bull sh#t. You have absolutely no idea what the bill will be like.
    As for universal healthcare, educate yourself, and why not experienced some, there are numerous versions. Even the Swiss went from “privatized” health care to universial in the 90s.
    Personally, I’ve experienced universial healthcare in numerous countries around the world. Having lived in the US for the last 10+ years and having worked for a private hospital I would say that it is mediocre. The bureaucracy is at the level of former eastern european communist countries and the care is overpriced for general treatments, just to start. Health care is similar to your insurance you just don’t know what the treatment will be like until you need it.

  21. eren says:

    300mil people so 80K/person, nothing for US.

  22. HCF says:

    @ leftback:

    > $10T here, $10T there, = pretty soon you’re talking real money….

    Remember when $10B seemed like a large amount of money? Those were the good ol’ days…

    HCF

  23. DeDude says:

    Bruce;

    At least she had the luck to get health care. I just talked with a nice older man on my street last week. He is dying of cancer because his insurance company delayed their approval of treatment 4 months. The kool-aid you are drinking must have a lot of that sour mash from those Tennessee wood “operations” in it. In the reality-based world all the major socialized medicine systems of Europe beats the “death-is-profit” system of this country not only in cost but also performance. And that is a fact.

  24. HCF says:

    I just looked it up to refresh my memory, but LTCM bailout was a grand total of…. $3.625B…

    $3.625B!? WTF? That’s pocket change in this environment…

    HCF

  25. super_trooper says:

    @ DeDude, in the UK it’s not luck, it’s your right.

  26. DeDude says:

    In health care the top-priority is “what is best for the patient” in business the top priority is “what is best for our profit”. Aligning the incentives between businesses “seeking more profit” and patients “seeking better health care” has so far failed miserably everywhere it has been attempted. In this country it has led to a war between patients, insurance companies and providers where over 20% of the total health care cost is wasted on the war between those three groups trying to push the cost onto each other. Large amounts of procedures and test are given simply as a way to increase the amount of billable dollars (and excused as “or they will sue me” defensive acts). No wonder the medical-industrial complex is scared to death of even allowing people the public option to compete fairly with the profit machines. Who the heck would choose to feed these pigs if they actually had an option not to do it?

  27. leftback says:

    The problem with the 80K/person calculation is that a lot of people are not going to pay their share – because they will already be unemployed and bankrupt, or perhaps destitute. So then it will be the net worth of the remainder of the population.

    We all know this will not be allowed to happen in the end. Sooner or later, one of the major markets (stocks, bonds, currency, commodities) will have to be crashed, and we all know which one it is going to be first, don’t we ?

    [Hint: It's the one with the dodgy roulette wheel inside the tent and all the carnival barkers outside]

  28. Onlooker from Troy says:

    HCF

    And yet that piddling $3.625B has proven to be much more expensive than that for the forces of moral hazard and precedent that it put in place. We can never go back now, it seems.

  29. DeDude says:

    The 80K/person is not expense, it is loans – and unless the world collapses the majority of those loans will be payed back (with interest). Most of it has to do with the dysfunction of capitalism. Everybody got scared and refused to lend their money to anybody else big big old Uncle Sam. So in order to keep borrowing (and society) going, “good old Uncle” took over the job of the capital markets. He borrows the money from the previous investors and lends it out to the previous borrowers, and all is good. At some point in time capitalism will get out of its dysfunction and the old borrowers and lenders will again get back to business and good old Uncle will zero himself out of the 80K/person and capitalism can again hammer its chest and claim to be the only game in town.

    Its all good – don’t worry, be happy :-)

  30. [...] Can we put on my VISA debit card? [...]

  31. Moss says:

    WTF happened to trickle down economics… this is more like a landslide.

  32. Random says:

    And yet for the bargain price of 16 trillion we could have given 100k to every taxpayer in the country. Now that would have actually helped fix both bank and personal balance sheets.

  33. Simon says:

    The responsible thing for the Fed to do is inflate away the debt. They are doing the responsible thing. Who are the ones with the savings that will lose out? We know who they are. They know who they are. Tim Geithner is doing what he does best with regard to them. What more could we want?

  34. Pat G. says:

    $24T should send a clear signal to our creditors and our citizens as to the USG’s priorities & intentions. No wonder the FED resists being transparent or being audited. We must remember that when the TARP bill came up the first time it was voted down because of public outcry and it was ONLY $700B. Think Americans would have approved $24T? Working behind our backs and without our approval, the USG has saddled us and our children and possibly their children with massive debt. And along the way they have squandered monies paid into the Social Security System which leaves us another $55T short. So in summary, they have screwed future retirees and children or the most vulnerable. Good F**king JOB!!
    Like Simon says; the FED has plans to inflate away the debt. Savers don’t matter. It is its only recourse out of the shithole it has created for us. And as soon as this rationalization begins to become reality and others recognize it, the dollar’s worth will evaporate. It could happen this year, or next or three years from now. But the point is: it will happen.

  35. xorion says:

    In September 2008 the Centre for Economic Policy Research estimated “The total stock of mortgages outstanding in the US (at) about $10 thousand billion.”

    So the U.S could have bailed out every outstanding mortgagee in the country for less than one-half of what it has spent bailing out the bankers. Hmmm.

  36. Avl Dao says:

    That $80k/person calculation is so nonsensical in terms of financial likelihoods…yet it is mathematically correct. But then anyone who’s taken advance math beyond DiffyQ’s knows that a lot of things exist in theoretical mathematics but not in the real world.

    It’s time for Chris Wjalen to give an update on Sovereign Default probabilities for the UK and US. Not that the US will ever ‘declare ‘a default…or ‘allow’ a 3rd party to utter such a declaration. At worst, we’ll do a Defacto Default spun as Mutually Negotiated Restructuring of Long-Term Relationships and Financial Obligations (MNRLTRO)…as China, Japan, the Oil Oligarchs and all the other suckers…ah uhm…Bag Holders…ah uhmm, I mean creditors spin the story to their domestic taxpayers and wage-earners.
    And heck, the UK and a whole other host of nations will do a MNRLTRFO ahead of us anyway.

  37. constantnormal says:

    A couple of nice items from clusterstock’s chart-of-the-day series:

    The first one is today’s and is relevant to the thread topic …

    http://www.businessinsider.com/chart-of-the-day-the-bailout-cost-2009-7

    Simply amazing how the reporting of the numbers just keeps on growing, with a bit more being “revealed” or “discovered” each month.

    The other item is about a month old, a comparison of the green shoots from the 1930s to today’s green shoots …

    http://www.businessinsider.com/green-shoots-circa-1930-2009-6

    I continue to recommend that everyone read Galbraith’s The Crash of 1929, as the political maneuvering is eerily similar between then and today, for all the “enlightened” economists’ chatter about how we are so much smarter today. Maybe we do know more about economics, but it is crystal clear that we are at exactly the same point in our political evolution.

  38. wunsacon says:

    I think Simon asked a serious question: *who* are these so-called “savers”? After their first two nickels, most people put their money into something else.

    The only “savers” are *bondholders*. Our biggest problem is that we chose to bail them out in the first place. To follow through — and put them back into their relative place — we must inflate away the real value of their IOU’s.

    Mind you, were I king, I would not have bailed out Fannie/Freddie/banks. But, once those stupid decisions were made, it would be even dumber not to follow through with the second act of inflating away.

    Each of these two acts by themselves is downright “awful”. But, together, these two wrongs make something less wrong.

  39. constantnormal says:

    And for those who are soooo focused on the Fed “inflating away” the debt …

    1) That has always been Bernanke’s plan, and he has said as much many times (but not recently) — fellas, dontcha think that if it were possible to do so, he would have done it by now? It’s pretty clear following his aborted attempt to prop up Treasuries back in the spring, that he has altered course. We’re back to trying to sell Treasuries to other suckers, without a lot of overt Fed support.

    2) And if Bernanke has arrived at the conclusion that there are good reasons to NOT destroy the US dollar and ruin the economy, when he was apparently relying on that as his fail-safe policy, doncha think that it might behoove you to try and put yourself in his place and try and figger out exactly why he has (apparently) revised his plans?

    3) consider this — that there is a chance that things are NOT as simple as you envision, and that there is more to deflation than a mere monetary phenomenon, and that printing enough electronic currency to wallpaper the galaxy might NOT extinguish the deflation. Then what would be the point of destroying the dollar, Hmmmmmm?

    Perhaps the essence of deflation is the destruction of trust that it leads to, engendering an unwillingness to lend or to borrow, or even consume (as in bling). How will papering the galaxy with excessive amounts of money turn THAT around?

    Wouldn’t such a discovery, that in the process of attempting to inflate away deflation (which is something more than merely obscene amounts of debt), we could utterly destroy the economy and nation, but still not erase the deflation, give pause to even a Federal Reserve chairman who had predicated his entire academic career on it?

    After all, inflation is more than just an excess of currency — the excess of currency leads to a certain mindset that is the true spectre of inflation, and that is what is targeted by raising interest rates to nosebleed levels, as one copuld drain the excess money via considerably lower interest rates. But they have to be PAINFUL for it to break the inflationary mindset.

    So what are the psychological aspects of monetary policy that will break a deflationary mindset? How can you convince people to trust when the marketplaces are clearly full of thieves, to spend when they fear for their employment, to load up on bling when they have concerns about how they can ever retire?

  40. [...] Total Bailout Cost = $23.7 Trillion Dollars - “U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program. The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.  “TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform. Costs include $2.3 trillion in programs offered by the Federal Deposit Insurance Corp., $7.4 trillion in TARP and other aid from the Treasury and $7.2 trillion in federal money for Fannie Mae, Freddie Mac, credit unions, Veterans Affairs and other federal programs, he said.  [...]

  41. [...] Yesterday, we noted that the 23 Trillion dollar bailout was a “WTF number.” [...]

  42. Swampfox says:

    @DeDude:
    “Aligning the incentives between businesses “seeking more profit” and patients “seeking better health care” has so far failed miserably everywhere it has been attempted. In this country it has led to a war between patients, insurance companies and providers where over 20% of the total health care cost is wasted on the war between those three groups trying to push the cost onto each other.”

    Dude, it’s never really been tried with western modern medicine. FDR’s wage and price controls lead to businesses offering health benefits to compete for new employees. Businesses asked for a tax credit, and got it. That was the 40s. Since then third party payer health care was enshrined in the tax code, we have yet to see what health care would like if the patient actually controlled their health care.

    I’m not quite sure why anyone would be pushing for us all to trust government health care when we just found out the same government is dolling out $23 trillion to various “friends.” If you want real reform, break the tax code and various prohibitions against interstate health insurance so that you kill off the third party payer. Get people back to using insurance as insurance rather than a maintenance program. Allow for real portability. And put people in charge of their health care costs.

  43. I-Man says:

    Sup bro?

  44. cvienne says:

    Yo I-Man…sorry just caught the thread

  45. I-Man says:

    Dude, I was beginning to think you were over it.

  46. I-Man says:

    Kinda quiet on the CV side today… just wondering what kind of percolations you have going on. I take it your silence speaks to what your open positions are like… meaning, you dont have any…

  47. cvienne says:

    No…just chillin’…

    When we went over 931 last week, I saw 956 in the cards so I bailed on EVERYTHING until further notice…

    We hit 956 today (a little above)…I’m not even convinced that a pullback is imminent here…In fact, I’d made a small prediction this morning that we’d look at 943 (and I think that where we hit intraday…

  48. cvienne says:

    Here’s kind of what I think…

    I’m working on the notion that anyone expecting a pullback to 900 is going to be disappointed…

    I’m more in the “consolidation” camp…Hang around here at 956 and let the bottom lines catch up…

    I’m looking for a 930-989 range to become established…(a temporary one)

  49. I-Man says:

    Gotcha. Just checking in. I actually have to bounce… but thank you. I need to go over some stuff tonight, hopefully I can come up with something good for tomorrow. I’m thinking a wee dram of scotch should help spark the noggin.

  50. I-Man says:

    I’m beginning to think you’re right… this could possibly be a minor bear trap within a much larger bull trap.

    But honestly… I think there are too many I-Man’s out there hoping to cover at 910 for us to ever see 910. The sharks smell the blood, and its too easy to goose this tape right now.

    I’m beginning to be haunted by murmurs of “never short a dull market… you idiot.” Your “if you were short at 930 then you should have covered today” missive from last Monday I think it was is going to live in infamy… in I and I dome anyhow.

    Cool runnings to you.
    Peace,
    I-Man

  51. Swampfox says:

    Have you two thought about IM, e-mail, or phone? Just throwing it out there.

  52. cvienne says:

    OK I-Man…

    I gotta bounce too…

    I’m still working on different ideas…I think the KEY is going to be the dollar…It looked like it wanted to try and rally today but in the end didn’t do much…

    I’m worried about a last 5 wave down in the dollar (which is why I’m hesitant to short stocks just yet)…When I see the final move on the dollar, I’ll be back in full force…

    Lata brah

  53. I-Man says:

    Is it bothering you or something? Or do you want in? Because we’re pretty pretentious… not sure you qualify bro-

  54. cvienne says:

    @Swampfox

    We were working on carrier pigeon, but I-Man is in the pacific NW & I’m in the Mid-Atlantic so it wasn’t feasible…

  55. Swampfox says:

    No bother. Have you thought of smoke signals?

  56. I-Man says:

    Firin up some smoke signals n0w mon… ya must be psychic. Ta ras.
    Nah… seriously…

    I hear ya, its an infrequent thing that we just do to not clog up the current discussions.

    Point taken.