Bloomberg: U.S. Government Now on Hook for $8 Trillion+

By: TraderMark Wednesday, November 26, 2008 3:45 PM

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Bernanke’s Fed is responsible for $4.74 trillion of pledges, or 61 percent of the total commitment of $7.76 trillion

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market,

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 11.5 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Here is a big one; I actually think this could be among the biggest liabilities when all is said and done!

Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac, a pledge that hasn’t been allocated to any agency.

I totally missed this one?? Wow - I must of been asleep when this one was announced

The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.

More... so on top of all these handouts we give tax breaks to the guilty parties - we talked about this in (Nov 13: Washington Post - A Quiet Windfall for US Banks)

Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying

Then yesterday, another $800 Billion

The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion. The central bank will purchase as much as $600 billion of debt issued or backed by government-chartered housing-finance companies. It will also set up a $200 billion program to support consumer and small-business loans, the Fed said in statements today in Washington.
“Clearly, the Fed and the Treasury are beginning to take a large amount of credit risk.”
The Fed won’t be removing cash from other parts of the financial system to make up for the purchases, government officials told reporters on a conference call. They rejected any comparison with Japan’s so-called quantitative easing effort to combat deflation (no of course not - we're better than Japan - how dare you compare us to a country with asset busts in both the stock market and real estate market. That's not us, do NOT call us Japan! Japanese people actually save money - don't you dare call us savers - we're better than that)

I just wonder if they will ever get around to asking "how we got here" and "what misguided beliefs as a nation took us to this stage". Why do I doubt it?

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