Bloomberg: Financial Rescue Pledges Now $12.8 Trillion
I guess I am going to need to update this weekly; just last week it was $12 Trillion (
Mar 25: Taxpayer Welfare to the System $3 Trillion Down, $9 Trillion to Go), now it appears to be up to $12.8 Trillion per Bloomberg. Numbing. And I was numb back in November 2008 when I said the Federal Reserve is now Atlas! (
Nov 26, 2008: US Government on Hook for $8+ Trillion) I don't know how people can be cheering this; the rewards are short term in scope for the long term weight we are attaching around the necks of future generations. Sure some of this dollars are "investments" (surely AIG will pay us back!) and much of it is 'pledges' (just in case) but we have literally built a parallel economy of dollars to prop up the actual US economy. As I wrote last week
Just to put it into perspective the ENTIRE U.S. economy is $13-14 Trillion. Our federal deficit is now $11 Trillion (and we're now on pace to add $2 Trillion a Year with all the new spending/plans). The entire market capitalization of the Wilshire 5000 (the broadest measure of the stock market) was roughly $8 Trillion last I checked.... call it $9 Trillion if you wish. (which is why I am saying of late, sure if we throw enough worthless paper dollars at the stock market, yes stocks will rise - at a major long term cost)
I am left speechless, especially as I watch the cheerleading of this. We are creating an illusion of recovery and eventual prosperity. We still have Medicare and Social Security to deal with (??) Anyone??
Per Bloomberg
- The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
- New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks.
- The money works out to $42,105 for every man, woman and child in the U.S.
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