[Pen-l] US taxpayers on hook for $13.9 trillion in support to financial sector

[Marv Gandall <marvgandall@xxxxxxxxxxxx>]

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.

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