Bailouts- The Cost to Americans II,III

The numbers are in. Can you believe the Economy rescue plan keeps adding up in dollars. Here are some of the figures. Totaldollars allocated to various programs for stimulus or guarantees by our government. Economic Stimulus February 2008 $168 Billion Dollars (actually spent $168 Billion), Bear Stearns  bailout March 2008 $29 Billion (Actually Spent $29 Billion), Discount Window Loans March 2008 $148 Billion (Actually Spent $148 Billion), Fannie Mae and Freddie Mac bailout September 2008 $200 Billion (Actually Spent $13.8 Billion), FHA Housing Rescue October 2008 320 Billion (Actually Spent Unknown), Auto Industry Energy Efficiency October 2008 $25 Billion (Actually Spent $0.00), TARP October 2008  +- $700 Billion( Actually Spent $205) Billion, Money Market Guarantees October 2008 $659 Billion (Actually Spent Unknown), Commercial Paper Funding Facility October 2008 $1.4 Trillion Actually (Spent $303.9 Billion), Unemployment benefit extensions November 2008 $8 Billion (Actually Spent $8 Billion),  AIG November 2008 152.5 Billion (Actually Spent $117.2 Billion), Finally, November 2008 Citgroup loan loss backstop, Term asset backed Securities Loan facility, GSE (Gov Sponsored Enterprises) Mortgage Backed Security Purchases, Debt Purchases and FDIC bank takeovers + 1 Trillion unlimited (Actually Spent $56.7 Billion). This Totals Allocated 7.2 Trillion and Actually spent $2.6 Trillion tax dollars.

Wow, so much for conservatism. The big question is based on pure economics of transactions, for every winner there is a looser. We now know who the loosers’ are.  Who are the winners and where did all this money go? Lets see, if people are loosing their homes, that’s one looser, investors in retirement accounts and pension plans are loose rs, that two more, people are loosing their jobs because of  loss of sales and services, that’s one more, who is winning.

The winners are those who take value (dollars) out of the markets through various investment strategies developed by Wharton School of Business and other economic think tanks educated in these types of schools including Columbia University by developing economic models on specific investment products or pools of stocks designed for one purpose, money extraction to be placed in the pockets of Trading Managers, CEO’s, CFO’s all of which who do not have the slightest care for the American Economic Systems. The tool for execution are derivatives. The initial intent of derivatives was to reduce rick on investments not withdraw asset value out of the market place.

A simple analogy for the layman is this; A well of water (dollars) provided financial institutions with water to cook, drink, and wash. This well water is replenished when it rains (savings) and the rain water seeps into the ground and refills the source for the well to continued to maintain its water level. During droughts the level declines but the well never dries up. What has happened in our financial institutions began using the water to wash cars, water their lawns, and they started bottling it and sold it to others in different packages, and consumed by drinking the water (compensation). The over use drained the well and perpetuated a self created drought.  To the rescue is our Government via the tax payer who will fill the well with future tax dollars for generations to come.


One Comment to “Bailouts- The Cost to Americans II,III”

  1. I agree wholeheartedly! Just wrote a blog similar to this myself..

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