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| US Prepared to Pledge Up to Seven Point Seven Trillion to Relieve Credit Crisis?Ignore the 7.4 quoted by Hawkins below -- the article has since been updated to fix the number at 7.76 trillion.The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago. ...The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world's companies and brought down three of the biggest Wall Street firms. ...The money that's been pledged is equivalent to $24,000 for every man, woman and child in the country. It's nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country's mortgages. ...Bernanke's Fed is responsible for $4.4 trillion of pledges, or 60 percent of the total commitment of $7.4 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago. "Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved," said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. "The other areas are quite a bit larger."This is scary. The government has now gotten itself Comments1
Damn, that's red.
Posted by: Herr Morgenholz at November 24, 2008 04:01 PM (5aa4z) 2
Double ammo stockpile, stat!
Posted by: toby928 at November 24, 2008 04:03 PM (PD1tk) 3
Ford and GM should just manufacture structured investment vehicles. That way they'd get a bailout.
Posted by: Gabriel Sutherland at November 24, 2008 04:04 PM (AHrTm) 4
You can see which countries now own us here: http://www.msnbc.msn.com/id/17424874/
Posted by: PJ at November 24, 2008 04:04 PM (FG8qn) 5
Don't get too alarmist. It's going to be bad, but it's not going to be 30's bad. Getting too alarmist will make Obama appear to deserve more credit than he will for avoiding something that isn't really going to happen.
Posted by: JohnJ at November 24, 2008 04:06 PM (md6gc) 6
I always thought that all this talk about nationalizing the 401k's was right wing paranoia, but where the hell else are they going to get this kind of money?
Posted by: RayJ at November 24, 2008 04:07 PM (87de7) 7
So much for going to Congress to fund the democratic party though bills and laws.
Now that we will have government workers in nationalized banks they can just tap the funds directly as "loans". Posted by: Rocks at November 24, 2008 04:09 PM (Q1lie) 8
Brother, can you spare $5.68 for a decaf mocha latte frapuccino with skim milk?
Posted by: FreakyBoy at November 24, 2008 04:09 PM (4s1it) Posted by: Rocks at November 24, 2008 04:11 PM (Q1lie) 10
ok late to this discussion - how many tax payers in US?
Posted by: Wolverine at November 24, 2008 04:11 PM (YbLyg) 11
This is flaming skull scary.
Posted by: shibumi at November 24, 2008 04:11 PM (tZB/c) 12
just give me 1,000,000 - I'll be fine - this has become ridiculous
Posted by: Wolverine at November 24, 2008 04:13 PM (YbLyg) 13
Simplicity. First principles.
The government covets. Actually, I'm afraid to go on with this. It works too well. Cut everything now and get back to basics and it'll hurt, but it can be saved. The farther they go, the worse they'll make things. Posted by: moviegique at November 24, 2008 04:13 PM (1y5Vr) 14
Time to start drinking.
Posted by: alexthechick at November 24, 2008 04:14 PM (LJ0he) 15
why not just print enough money to make everyone a millionaire and give it away ... why stop at this
Posted by: Wolverine at November 24, 2008 04:15 PM (YbLyg) 16
Who cares? I just want to know who will get kicked off of American Idol. Posted by: Average Turd at November 24, 2008 04:18 PM (Qd7GC) 17
The Feds can always cut the reins and let the horses go. I imagine it will have no choice, at the rate things are going. Then again, the half-the-gdp-guarantee suggests that things would be much, much worse--Iceland bad, perhaps--if it didn't offer the guarantee. Interesting times. I recommend stockpiling grains, beans and other dry goods. Bland, but with the right mix, nutritious enough.
Posted by: Steve the Pirate at November 24, 2008 04:18 PM (W54Uh) 18
15 why not just print enough money to make everyone a millionaire and give it away ... why stop at this hyperinflation. It's a nation killer. Posted by: blogRot at November 24, 2008 04:18 PM (EKMxC) Posted by: FreakyBoy at November 24, 2008 04:19 PM (4s1it) 20
Don't get too alarmist. It's going to be bad, but it's not going to be 30's bad.
Well, I may have agreed pre-TARP that it wan't going to be that bad. But we've now ensured that it will be very very bad by using TARP as a piggy bank for failed business models to continue their failed policies. It seems now we are flirting dangerously with a better chance of it being even 30's (or worse) bad by directly tying the liquidity of the nation directly to even more of those failed policies. If we do this, it looks very much like the death of America's free-market/capitalist philosophy. And judging from history, it will take the death of many millions of regular folks before we ever again see the ascendancy of capitalism over socialism. Nice democracy we got us here. Posted by: krakatoa at November 24, 2008 04:20 PM (YM1XM) 21
Cut everything now and get back to basics and it'll hurt, but it can be saved. The farther they go, the worse they'll make things. Yeah. Stop throwing good money after bad. It should be clear by this point that we can't avert a disaster by spending (printing) money, but we can sure as hell make it worse, and totally trash U.S. financial standing in the world by doing so. Stop throwing money around, close your eyes and brace yourself. At this point, we're only adding to the nastiness of the hangover. Start by telling detroit to take a hike.
Posted by: jdub at November 24, 2008 04:20 PM (t9pKb) Posted by: Sen. Barney Frank at November 24, 2008 04:21 PM (t9pKb) 23
I was skeptical about the bailout package for precisely this reason. Once you start dumping taxpayer dollars in the trough there's guaranteed to be a stampede of snouts fighting to get into the trough.
We were sold "the dead rising from the grave, dogs and cats living together, human sacrifice, mass hysteria" in the credit market if we hesitated on a bailout bill. Even waiting a weekend would trigger a 50% drop in the market (that didn't happen in the week after the first bailout bill failed). I was an idiot for even questioning the need for federal funds to rescue Wall Street and wondering if it would just be the camel's nose under the tent. So are we enjoying our sprint to full-on socialism now? So which is the next sector of our economy to be anointed as too big/vital/well lobbied to fail? Anyone really want to bet that the automakers won't be getting their slice of the pie now? Suckers. Posted by: Baron Von Ottomatic at November 24, 2008 04:23 PM (Ulsfn) 24
Cut everything now and get back to basics and it'll hurt, but it can be saved How? Seriously, if many if not most banks in the country go broke along with a very large part of the manufacturing sector which means that individual spending which makes up the majority of economic activity in this country grinds to a halt, how exactly would it be saved? What would "it" be? I hate having gov't involved with private industry as much as anyone but given the puckered condition not just we but the world economy happens to be in now, what is the alternative and how exactly would it be better? Posted by: JackStraw at November 24, 2008 04:23 PM (VW9/y) 25
I'd really be worried if it weren't for all these government confidence-building measures. Man, I've been feeling so fuckin' confident lately it's just unreal.
Posted by: Bugler at November 24, 2008 04:24 PM (YCVBL) Posted by: joeindc44 at November 24, 2008 04:24 PM (QxSug) 27
If the US charges CitiBank 22.75% APR on purchases and 24.75% APR on cash advances, plus an annual fee of $1,000,000,000, I'm down with it.
Posted by: FreakyBoy at November 24, 2008 04:27 PM (4s1it) 28
This is pretty much in line with my expectations, and my prescription hasn't changed either. Don't do bailouts. Let the market crash. It'll suck mightily but not as much as if we continue trying to bail out failing companies. The more the economy is propped up artificially, the bigger the eventual crash. Posted by: Cautiously Pessimistic at November 24, 2008 04:27 PM (ltwze) 29
Luckily the government still has plenty of money to keep us fully employed building wind farms and installing solar panels.
Ethanol? That's for drinkin', not for drivin'. Unless you're in Washington. It's a floor wax and a dessert topping! Posted by: Baron Von Ottomatic at November 24, 2008 04:28 PM (Ulsfn) 30
The feds should just give everyone a million dollars directly, if we're talking about that kind of money.
Posted by: The Sanity Inspector at November 24, 2008 04:28 PM (uw+0A) 31
Looks like time to get a cushy government job.
Posted by: Jean at November 24, 2008 04:31 PM (HVRSA) 32
Maybe the IMF will come in and force an austerity package?
Posted by: Jean at November 24, 2008 04:32 PM (HVRSA) 33
Um, what happened to stealing all of Iraq's oil?
The left spent 6 years telling me that was the plan. Well all of that oil must be worth some some, so let's start reaping the profits! Wait, what? We didn't steal Iraq's oil? WTF? Stupid Boooshitler. Posted by: DrewM. at November 24, 2008 04:32 PM (hlYel) 34
my comment #15 was meant as sarcasm - yikes
Posted by: Wolverine at November 24, 2008 04:33 PM (YbLyg) 35
Where's the bailout of the antacid industry?
Posted by: The Sanity Inspector at November 24, 2008 04:35 PM (uw+0A) 36
where's the bailout for handsome stock traders?
Posted by: Wolverine at November 24, 2008 04:38 PM (YbLyg) 37
This is lunacy. We the People are backstopping the chicanery of "too big to fail" but not too big to fuck up enterprises, to what end? So that the seizure of credit will stop? It won't stop because no one believes appraisals are accurate about values and the market signals are that we are not at the bottom. It won't reach bottom until failures start happening and assets can realize prices at the appropriate market level. This whole bailout scenario is delaying the reckoning of accounts by giving hope to our oligarchs that Uncle Sam will save them from their lack of probity. The Friends of Paulson (FOP) are the same greedy fucks that brought us this mess and The One is going to bring in another member of the Club to continue the bailouts, backstops and mortgaging of the US taxpayer. Who in this situation is looking out for middle America? Republicans should be running away from this Treasury trainwreck and seek a means of cutting off Paulson's authority. It is time to start cleaving failing institutions into parts someone wants and not trying to preserve these economic millstones around our necks. If there is loss, let the shareholders take their medicine. Enough with the pity party for these losers who made stupid leverage bets.
Posted by: Teleprompter Messiah at November 24, 2008 04:42 PM (+L1YR) 38
The only way out of this mess is with war...I think it's what FDR learned.
Posted by: Winston at November 24, 2008 04:44 PM (FggW0) 39
...The money that's been pledged is equivalent to $24,000 for every man, woman and child in the country. ok just give each tax payer a cool $100,000.00 Posted by: Wolverine at November 24, 2008 04:45 PM (YbLyg) 40
Everyone knows you have to throw money in a hole and light it on fire to make money.
Posted by: kefka at November 24, 2008 04:46 PM (fKivs) 41
My question is: Where are the shareholders on all of this? It's technically their money that' the dumbasses are burning through? Why haven't the entire boards of Citigroup, GM, etc. been keelhauled by an angry mob of stockholders?
Posted by: Techie at November 24, 2008 04:48 PM (EVMm7) 42
fannie and freddie off scott free? Posted by: Wolverine at November 24, 2008 04:51 PM (YbLyg) 43
I keep hoping they will come to their senses and stop this madness. They are going to bankrupt the US trying to chase this thing. It was really the sheer insanity of the reaction to this crisis that pushed me over the edge into gun ownership. It seems right now that they are hell-bent into bringing the whole mess crashing down.
Posted by: doug at November 24, 2008 04:52 PM (dxxkS) 44
Requiring the Fed to disclose loan recipients might set off panic This scares me - we know it's going to be bad - but what does the government know that we don't know - and why is the government afraid to tell us? Apparently there is no cap at all on the Fed - my guess is that they will print way over $10 trillion - next we'll see Starbucks getting a bailout. Posted by: markytom at November 24, 2008 04:53 PM (ZG9as) 45
Just put in on my credit card.
Posted by: Uncle Sam at November 24, 2008 04:56 PM (ct2uj) Posted by: Blacksheep at November 24, 2008 04:57 PM (8/DeP) 47
I have a lot of student loans. If there's a bailout on that front, I'm going to quit paying because it's the only rational thing to do. I'll get a job making shit and wait until my loans are forgiven. I'll jump through whatever hoops the federal government places in front of me and play by the rules.
But I'm definitely going John Galt on those student loans. Posted by: Nom de Blog at November 24, 2008 05:01 PM (nOQ1R) 48
re: kefka:"Everyone knows you have to throw money in a hole and light it on fire to make money."
If you love America, you'll throw money in its hole... Posted by: adagioforstrings at November 24, 2008 05:07 PM (gh3x1) 49
Raising money to cover the crisis shouldn't be a problem for the O and his cadre of ACORN/AVS violators.
He just needs to put some fucking knowledge on his economic team by expanding his online campaign contribution scheme. Do it for the children, Barry. The Middle-Class Children. Posted by: 2nd Tier Thought Leader at November 24, 2008 05:09 PM (aaGD+) 50
It certainly is scary. What is the worst thing that could happen though? Hyper inflation and no country? We cannot control the first and if it happens it happens, but the second part is our choice. Everyone can just reject political violence and we will cut a few zero's off the currency. No big deal.
I do not want to threadjack, but what do you imagine the worst possible outcome is? Posted by: Mike at November 24, 2008 05:15 PM (GNCy6) 51
It's nine times what the U.S. has spent so far on wars in Iraq and
Afghanistan, according to Congressional Budget Office figures.
I don't want to hear another Murtha-farkin word about how much money was spent on "illegal wars". Not. One. Gottdammed. Word. Posted by: Drumwaster at November 24, 2008 05:15 PM (Ymor3) 52
When you have an asset bubble, there are basically two schools of thought about fixing things. The Monetarists would say that the problem is that everything else isn't worth what the bubbled assets are worth, so everything should be repriced higher to match. The Austrians would say that the bubbled assets are too highly priced, and should be written down to their true value.
The current administration are generally Monetarists. This implies that there is going to be a round of inflation, which will hit hardest those who are holding their cash closely. Posted by: cthulhu at November 24, 2008 05:25 PM (4lUtW) 53
Perhaps the government becoming a bailout junkie should have been considered about two months ago.
After severe deflation comes severe inflation. Probably the only way out will be the same as the middle of the 20th century--a World War to rev up the country's economy. The only problem is in deciding the winning side when both use neutron bombs. Posted by: DCox at November 24, 2008 05:29 PM (2pT9a) 54
Sure, it will be bad here, but our lunatic fringe is more contained than in, say, Africa or China. Just wait till unstable societies fall. Their Messiah will make ours look like Thomas Jefferson, and will wreak havoc. War will come, eventually. Posted by: PJ at November 24, 2008 05:38 PM (FG8qn) 55
Bank failures are at a similar financial loss level with the great depression given larger banks today.
Home mortgage loan modifications are failing at a 50% rate. These are the re-negotiated loans from the previous bailout cash dump. "DOOM D-D-DOOM DOOM DOOOM! "Doom, doom, doom, doomity, doom, doom, we is all doomed." Deekin Scalesinger Posted by: Travis at November 24, 2008 05:43 PM (GqpEk) 56
Hmmmm.
Jesus H. Christ!! Is ok for me to say (again) that I really regret voting for Bush? That electing non-conservative Republicans is a pointless futile waste of fucking time!? Or am I a fucking moby for pointing this shit out? Again. Posted by: memomachine at November 24, 2008 05:46 PM (f4Zt4) 57
That electing non-conservative Republicans is a pointless futile waste of fucking time!?
Or am I a fucking moby for pointing this shit out? Again. Posted by: memomachine at November 24, 2008 05:46 PM (f4Zt4) Hey the best part is getting to vote for a RINO stacked GOP in 2012 or Obama Part Deux. You lucky bastard! Posted by: Travis at November 24, 2008 05:49 PM (GqpEk) 58
Hmmm.
And who will be blamed for this shit for the next 100 fucking years? Who? We will. Every fucking election cycle from now on the Democrats will place the blame on us all. Republicans. Conservatives. It doesn't even fucking matter anymore. Hi. I'm memomachine and I'm a fiscal conservative who has recently been completely and uttery BONED by the fucking Republicans in Congress and that fucking bastard in the White House. Thank you. ... Next time you motherfuckers insist that I vote for a goddamn motherfucking Republican because that fucker is a Republican you can kiss my ass. Posted by: memomachine at November 24, 2008 05:53 PM (f4Zt4) 59
Home mortgage loan modifications are failing at a 50% rate. These are
the re-negotiated loans from the previous bailout cash dump.
What ?! Do you mean to say that we threw money at the problem without requiring a change in the behavior that caused the problem in the first place, and now the borrowers have failed again ? The deuce you say .... Posted by: Blacksheep at November 24, 2008 05:53 PM (8/DeP) 60
Hmmmm.
@Travis "Hey the best part is getting to vote for a RINO stacked GOP in 2012 or Obama Part Deux. You lucky bastard!" Oh Christ. Excuse me. I've got a date with a bottle of Bushmills. Posted by: memomachine at November 24, 2008 05:58 PM (f4Zt4) 61
I hate Ace's analogy because I don't want to kill the pretty horses. Posted by: spurringirl at November 24, 2008 05:58 PM (GVeZ+) 62
"War will come, eventually."
It is a long chain of events from someone not paying their mortgage to someone getting shot in Africa during civil unrest. It will be a really long chain if that someone is me. Oh well. Posted by: Mike at November 24, 2008 06:05 PM (GNCy6) 63
With any luck the backstop will never be reached, but if bail-out companies continue sending their executives to vacation spas we will reach that. The financial industry and its regulatory capture - and they complain about the military-industrial complex - at least with MIC we get some stuff that goes boom! I'm slowly coming around to pitchforks-torches-tar-feathers as a way for the people to assemble for redress of greivances. Peaceable? It can be if we aren't interrupted. Posted by: Mikey NTH at November 24, 2008 06:37 PM (TUWci) 64
I'm slowly coming around to pitchforks-torches-tar-feathers as a way for the people to assemble for redress of greivances. Peaceable? It can be if we aren't interrupted. Posted by: Mikey NTH you forgot the ar15s. Posted by: e.koenig at November 24, 2008 07:12 PM (2J+Vs) 65
Invade Mexico. They've got plenty of oil, we understand the language and culture pretty well, they've got a failing central government.
Posted by: Eric j at November 24, 2008 07:20 PM (K2gxn) Posted by: MlR at November 24, 2008 08:01 PM (PLmsY) 67
Hmmm. *claps* The problem is I wonder if we'll ever get to vote for an actual Conservative again. Posted by: MlR at November 24, 2008 08:11 PM (PLmsY) 68
The problem is I wonder if we'll ever get to vote for an actual Conservative again.
Doesn't seem like it. So far the Republican response to election loss is a move to the left. People keep talking about the "next Reagan", but the reality is there isn't a lot of support for small government in the electorate. I think the Republicans are right and wrong about this. On the one hand they're right the populace is moving to the left. On the other hand, their response is wrong - the Republicans ought to be converting the squishy people in the middle into conservatives instead of trying to accommodate their squishiness. That should have been the lesson of Reagan and Newt's Contract With America. If they keep going with this Dem-lite bullshit they're doomed. Posted by: Ace's liver at November 24, 2008 08:34 PM (XIXhw) 69
So when do I get my check for $24K? I got less than $16K owing on my mortgage, so I could blow the rest over a weekend stimulating the local high priced call girl economy.
Posted by: Purple Avenger at November 24, 2008 09:29 PM (vIdk6) 70
I hate Ace's analogy because I don't want to kill the pretty horses.
I expect to end up having to eat the horses, if I'm lucky Posted by: toby928 at November 24, 2008 09:29 PM (PD1tk) 71
Don't get too alarmist. It's going to be bad, but
it's not going to be 30's bad. Getting too alarmist will make Obama
appear to deserve more credit than he will for avoiding something that
isn't really going to happen.
Posted by: JohnJ at November 24, 2008 04:06 PM (md6gc) Wow, here's a guy that hasn't been paying attention. Posted by: The Haimster at November 24, 2008 11:24 PM (82DKu) Posted by: Brown Line at November 24, 2008 11:44 PM (xYeJ1) 73
Just want to remind everyone that the folks directly responsible for this mess are all smart talented graduates of elite Ivy League institutions.
Posted by: chicagorefugee at November 24, 2008 11:56 PM (s81BJ) 74
We're all just screwed, folks. It's way past time to to stock up on the beans, bullets and bandaids ...and get to know your local survivalist.
Posted by: Warren Bonesteel at November 25, 2008 12:39 AM (h42Mb) Posted by: Mike at November 25, 2008 02:49 AM (GNCy6) 76
Stack this on the last crazy comment. I am losing my mind and being really creepy/some sort of personality disorder, but... "to ridicule him for lacking what she only knew about by way of sordid backstairs dealing." I would not ridicule him because he is brilliant. Screwing around on the internet is one thing, the pakistan test is another and I wish you would stop. The "backstairs dealing" was on the internet for everyone and we had nothing to do with it. I am losing it AGRHHHHHH ARHHHHHH Where is reality? I am checking out soon. Nobody anywhere can say anything to anyone. Posted by: Mike at November 25, 2008 04:16 AM (GNCy6) 77
So, Ace, I guess now you finally see why some of us were against the initial bailout. It's called a "slippery slope," jackass.
Posted by: 5th Level Fighter at November 25, 2008 08:10 AM (wTiGz) 78
Have we now figured out why killing the bill would have been a good thing? I'm glad we have a plethora of gun shops and gun ownership around here. And we're near mountains, too - perfect for setting up the new Galt's Gulch. Posted by: Francase at November 25, 2008 09:11 AM (nrLPb) 79
This was something I hadn't considered before. Stupidly.
... Either we're going to save those horses, or we're going down the chasm with them. Lots of people were in favor of the bailout. Some of us were not, stating that throwing cash onto the bonfire would likely exacerbate the problem and lengthen its duration. I was kind of hoping that I was going to be proven wrong. Unfortunately, it does not appear that I will be. I remember Megan McArdle being a member of the "we've got to do something". She's a smart lady, but there are times when I wonder what exact branch of economics she studied, especially since she claims to be a libertarian with regards to economic policy. Posted by: physics geek at November 25, 2008 12:12 PM (MT22W) 80
And from Megan:
I don't want to be a self-panicker; these things take time. But I'm becoming increasingly convinced that the original theory of the bailout--that it would step in and provide a firewall to prevent future failures--has been proven wrong. I still think it was worth trying, prospectively; there seemed to be at the time, a reasonable prospect that it would save money in the long run by forestalling the need for future bailouts. But in hindsight, it hasn't worked. No it wasn't, and no shit, Sherlock. Posted by: physics geek at November 25, 2008 12:41 PM (MT22W) 81
ohh what now?!
I thought we already had the largest debt in history at this point... now the illuminati left wants to tack on another 7 trillion, eh? Well I guess we shouldn't have argued that 700 billion dollar plan much then, seems a little irrelevant in retrospect. Posted by: RJ at November 25, 2008 10:40 PM (KRl3v) 82
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