The financial blog, Calculated Risk, has reproduced a table from the latest edition of the FDIC journal Supervisory Insights which details the $13.9 trillion in US government support pledged to the financial sector in 2008. These commitments include all potental taxpayer liabilities flowing from Federal Reserve, Treasury, FDIC and other government-sponsored asset purchases, loans, and loan guarantees to the financial sector via the TARP, TALF, CPFF, PPIP, etc. and bailouts of AIG, Fannie Mae, Bear Stearns, Citi and other financial institutions.
See: http://www.calculatedriskblog.com/2009/06/139-trillion-total-maximum-government.html The total potential cost of the programs will never be realized, but represent nearly the equivalent of the estimated US GDP last year of $14.2 trillion. These programs to support rather than liquidate America's insolvent financial institutions - more precisely, the increase in the US money supply and the fear of a devalued USD which are a consequence - is what has alarmed US creditors, notably the major holders of US paper such as the so-called BRIC nations who met this week in Yekaterinaburg. Their recent modest initiatives and well-publicized threats to diversify out of the dollar are designed to pressure the USG to stop throwing money at zombie banks and corporations while simultaneously reassuring nervous financial markets they are not intending to provoke a run on the dollar which would ravage their own reserves. While the BRIC's and other US foreign investors have no interest in propping up the US ailing banking, auto, and other sectors - in fact, their interests would dictate just the opposite - they have notably refrained to date from calling for cuts to spending programs aimed at American workers and homeowners whose consumption has supported their exports. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
