Bailout Could Total $24 Trillion or $80,000 Per American

First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets. Then it was about using $250 billion of it for the U.S. government to buy stakes in banks. Now reports have surfaced that bankers have been using the money to buy other banks, and might use the money to pay dividends, give employee raises and executive bonuses, or just sit on it. Insurance companies now want a piece - maybe automakers, too, even though Congress has approved $25 billion in low-interest loans to them.

Last year, we were told the bailout was designed to buy up toxic assets and allow the banks to get back into the business of loaning. However, Henry Paulson lied to Congress and used the first $350 billion to buy preferred stock in banks, and the banks used the money to buy up competitors, pay CEOs and take lavish vacations. Bloomberg and Fox have sued the government in an effort to find out where all the money went, but the government feels that in an “emergency” situation it doesn’t need to be accountable for its actions. The Obama administration calls this “transparency.” All of this borrowing and spending has nothing to do with assets or unfreezing lending. It has to do with debt, the interest owed on debt, and expanding a government owned lock, stock and barrel by an international banking elite. - Kurt Nimmo, Infowars

Government Bailout Could Total $24 Trillion or $80,000 Per American

July 20, 2009

Associated Press – The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday.

Under the worst of circumstances, the report said, the government's maximum exposure could total nearly $24 trillion, or $80,000 for every American.

The figures are part of a tough new quarterly report to Congress from special inspector general Neil Barofsky, who accuses the Treasury Department of repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent.

The $4.7 trillion commitment to the industry takes into account about 50 initiatives and programs set up since 2007 by the Bush and Obama administrations as well as by the Federal Reserve. Barofsky oversees one of the initiatives — the $700 billion Troubled Asset Relief Program.

Much of the government assistance is backed by collateral and Barofsky's $23.7 trillion estimate represents the gross, not net, exposure that the government could face...

Barofsky's $23.7 trillion estimate represents the maximum exposure that the government would face if all eligible applicants requested the maximum assistance at the same time. It does not account for the fees and other costs that some of these programs charge and for the collateral that many of the programs require that participants provide.

For instance, Barofsky assigns $6.8 trillion in potential exposure to the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae, Freddie Mac and the 12 federal home loan banks. However, losses of that magnitude would require every homeowner with a Fannie or Freddie guaranteed mortgage to default and the value of the homes drop to zero. And Barofsky concedes that the finance agency and Treasury are not entirely liable for Fannie and Freddie losses.

The total also includes $3.35 trillion for a Treasury program, announced in September, to back money market mutual funds. But the Treasury has capped its liability for that program at $50 billion. "While quantity and quality of the assets backing all of these programs vary, ignoring that side of these programs misrepresents 'potential exposure' associated with them," Treasury's Williams said.

In his report, Barofsky says Treasury has accepted some of his recommendations for greater accountability, but says the department has not taken steps to require all TARP recipients to report on their actual use of funds. He said Treasury also should report the values of its investments in banks and other financial institutions, disclose the identity of borrowers under a nonrecourse loan program, and disclose trading activity under a public-private investment fund.

Barofsky says Treasury's inaction means taxpayers have not been told what the financial institutions that have received assistance are doing with the money...