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The $9.7 Trillion Bailout

Written By Brian Hicks

Posted February 9, 2009


pitch fork


While Wall Street and the world waits for tomorrow’s grand unveiling of the latest scheme to fix it all, it is important to remember  how high the real bill could be. Because while Congress haggles over a few billion here and a few billion there, in the big picture the taxpayer is already on the hook for as much as $9.7 trillion.

That is the equivalent of 9,700,000 million million dollar bills if there was such a thing-a number entirely too big for anyone to wrap their heads around.

The funny thing is it’s almost enough to payoff every single mortgage in the entire country, and a full $8 trillion of it has never been voted on by lawmakers!

Instead, it has been dumped onto the backs of taxpayers by fiat alone, courtesy of the FDIC and the Federal Reserve.

Here’s the story from Bloomberg by Mark Pittman and Bob Ivry entitled: U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes


The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged to provide up to $5.7 trillion more if needed. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps. The Senate is to vote early this week on a stimulus package totaling at least $780 billion that President Barack Obama says is needed to avert a deeper recession. That measure would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus package to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates approved in 2008 have been voted on by lawmakers. The remaining $8 trillion in commitments are lending programs and guarantees, almost all under the authority of the Fed and the FDIC. The recipients’ names have not been disclosed.

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid.

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.”


This is nothing short of outrageous.

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