Not too happy about the $700 billion financial bailout or billions more for the Big Three automakers? Don’t worry, that’s just peanuts!
The overall government “bailout” is quite a bit larger — as in ten times larger. The federal government — in other words, you and me (and our rulers) — is ready to provide more than $7.7 trillion to bailout whoever might need to be bailed out.
This includes $3.2 trillion already taken from the Federal Reserve by financial institutions. And it also includes money from the Federal Deposit Insurance Corporation and Federal Housing Administration mortgage guarantees.
The total amount of $7.7 trillion is equivalent to half our yearly gross national product. So, should families, when they get in financial trouble, borrow and spend half their yearly income? No, I think this is one of those “don’t try this at home” type deals.
When Congress approved the legislation for $700 billion to establish the Troubled Asset Relief Program (TARP), there was talk of the need for transparency. But there has been precious little transparency for all this other money spewing forth from the Federal Reserve and various government entities.
Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. says, “given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency.”
Yes, how about a smidgen of transparency? Or better yet, an end to all these bailouts.
This is Common Sense. I’m Paul Jacob.