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Bailouts could cost U.S. $23 trillion

ReverendHellh0und

ReverendHellh0und

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Bailouts could cost U.S. $23 trillion

Bailouts could cost U.S. $23 trillion - Eamon Javers - POLITICO.com

A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year.


If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.



Read more: Bailouts could cost U.S. $23 trillion - Eamon Javers - POLITICO.com
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Holy crap! That is a lot of lap dances! :shock: Tell me if this is true, what does it mean to you. I even though am Obscenley rich, can't even fathom this amount in any tangent coherency..... This is not good, and will not end well for us....


What say you?
 
I say check the rhyme on how much it would cost without buying the mortgage-backed securities and other forms of securitised debt that clogged up the money market. Lot more than that.
 
Reverend_Hellh0und said:
Holy crap! That is a lot of lap dances! :shock: Tell me if this is true, what does it mean to you. I even though am Obscenley rich, can't even fathom this amount in any tangent coherency..... This is not good, and will not end well for us....


What say you?
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:shock:

Good lord!

I don't know why the Obama Administration seems to think that the US has a bottomless pocket book. I don't see how this could possibly end good and what's worse is that a lot of the people cheering this most likely either have little to no understanding about the possible ramifications or they just don't care.
 
Dr_Patrick said:
:shock:

Good lord!

I don't know why the Obama Administration seems to think that the US has a bottomless pocket book. I don't see how this could possibly end good and what's worse is that a lot of the people cheering this most likely either have little to no understanding about the possible ramifications or they just don't care.
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You do know that Obama has been under the guise of "Catching the rich" been going after off shore accounts......


Do you think, that this is a set up, to afford no American reprive from future opressive taxes... Of course this is speculation of near conpiritorical manner, but I do wonder sometimes.
 
Reverend_Hellh0und said:
You do know that Obama has been under the guise of "Catching the rich" been going after off shore accounts......


Do you think, that this is a set up, to afford no American reprive from future opressive taxes... Of course this is speculation of near conpiritorical manner, but I do wonder sometimes.
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That very well could be, but I think that he really believes he's doing the right thing by doing this crap. It's too bad he doesn't have enough foresight to see that this will damage us quite a bit. Well, here's yet another reason why many of the people who bashed Bush for his out of control spending have absolutely nothing to justify defending Obama for this.
 
Dr_Patrick said:
That very well could be, but I think that he really believes he's doing the right thing by doing this crap. It's too bad he doesn't have enough foresight to see that this will damage us quite a bit. Well, here's yet another reason why many of the people who bashed Bush for his out of control spending have absolutely nothing to justify defending Obama for this.
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100% agree. I abhorred Bush's spending and during the bailouts, I was shocked about how NOT DIFFERENT he was from Obama or McCain......


We are not on a good path here.
 
We're going to have to start WWIII just to prevent foreign nations from repossessing our country.
 
Stupidly ridiculous assumptions went into that number

Source [NYTimes | Big Estimate, Worth Little, on Bailout ]

But in the report accompanying his testimony, Mr. Barofsky conceded the number was vastly overblown. It includes estimates of the maximum cost of programs that have already been canceled or that never got under way.

It also assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless.

It would also require the Treasury itself to default on securities purchased by the Federal Reserve system.
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This number isn't what the US government could possibly have to pay out, it's a tally of the worth of every asset in the entire financial system. Anybody who takes this seriously is just grasping at whatever they can find to support a position they already hold
 
Kernel Sanders said:
Stupidly ridiculous assumptions went into that number

Source [NYTimes | Big Estimate, Worth Little, on Bailout ]



This number isn't what the US government could possibly have to pay out, it's a tally of the worth of every asset in the entire financial system. Anybody who takes this seriously is just grasping at whatever they can find to support a position they already hold
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So whats your number? half? 1/4?


Still is shocking no?
 
Kernel Sanders said:
This number isn't what the US government could possibly have to pay out, it's a tally of the worth of every asset in the entire financial system. Anybody who takes this seriously is just grasping at whatever they can find to support a position they already hold
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It is a very serious number. That is what the "worst case" for the bank bailouts looks like.

Keep in mind that the rationale behind derivatives and securitization is in essence a belief that, because the worst case is an unlikely case, it can be ignored.

Until, of course, the worst case happens--which, because it was ignored, is several orders of magnitude larger than it would have been otherwise.
 
celticlord said:
It is a very serious number. That is what the "worst case" for the bank bailouts looks like.

Keep in mind that the rationale behind derivatives and securitization is in essence a belief that, because the worst case is an unlikely case, it can be ignored.

Until, of course, the worst case happens--which, because it was ignored, is several orders of magnitude larger than it would have been otherwise.
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This is just one of the assumptions

It assumes that every bank in America fails, with not a single asset worth even a penny.
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The only way I could see this happening is all out nuclear war or the Apocalypse, and in either case we'd have a bit more to worry about than bailing out banks
 
Kernel Sanders said:
The only way I could see this happening is all out nuclear war or the Apocalypse, and in either case we'd have a bit more to worry about than bailing out banks
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Hyperinflation could do it.

China and Japan dumping their dollar denominated holdings could do it.

Any scenario that demolishes the value of the dollar precipitates exactly such a crisis. Does not require nuclear war or the Second Coming.
 
Reverend_Hellh0und said:
100% agree. I abhorred Bush's spending and during the bailouts, I was shocked about how NOT DIFFERENT he was from Obama or McCain......


We are not on a good path here.
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We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.
 
celticlord said:
Hyperinflation could do it.

China and Japan dumping their dollar denominated holdings could do it.

Any scenario that demolishes the value of the dollar precipitates exactly such a crisis. Does not require nuclear war or the Second Coming.
Click to expand...

Could close every single bank in the US, reduce every single asset of every single bank to zero, cause every single mortgage to slip into default, and cause every single mortgaged home's value to drop to zero? If that ever happened our economy would be so thoroughly and completely shot that we wouldn't be worrying about TARP what with the every nation on Earth breaking into revolution and all
 
Dr_Patrick said:
:shock:

Good lord!

I don't know why the Obama Administration seems to think that the US has a bottomless pocket book. I don't see how this could possibly end good and what's worse is that a lot of the people cheering this most likely either have little to no understanding about the possible ramifications or they just don't care.
Click to expand...

Reverend_Hellh0und said:
You do know that Obama has been under the guise of "Catching the rich" been going after off shore accounts......


Do you think, that this is a set up, to afford no American reprive from future opressive taxes... Of course this is speculation of near conpiritorical manner, but I do wonder sometimes.
Click to expand...

You both do realize the bailouts were enacted under Bush and not Obama right? Don't let logic stop you from blaming Obama for Bush's policies though.
 
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Kernel Sanders said:
Could close every single bank in the US, reduce every single asset of every single bank to zero, cause every single mortgage to slip into default, and cause every single mortgaged home's value to drop to zero? If that ever happened our economy would be so thoroughly and completely shot that we wouldn't be worrying about TARP what with the every nation on Earth breaking into revolution and all
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You are correct that TARP would cease to be the focus of everyone's attention.

However, given the inflationary pressures of TARP's money-creating mechanisms, failiure to consider the potentials for hyperinflation distressingly tend to increase the probability of hyperinflation.

If we worry about TARP and the worst case now, we have an opportunity to avoid that worst case. If we ignore the worst case for too long, we guarantee its occurrence.
 
Worst case scenario is far worse than $23 trillion IMHO. From July 2008 until March 2009, it was estimated by plenty of analysts that the loss in net worth was between $10-$25 trillion. Hyperinflation would be devastating to say the least but....

Given the current level of debt, the size of the deficit, and "crashing dollar" sentiment, the demand for treasuries (specifically long term) has been quite amazing.

In the later part of the 21st century, there were extremely rare (or non existent) Euro auctions where the bid to cover was over 2. Some might site the safety of the US dollar, and i tend to agree. Hyperinflation is highly unlikely given the global stakes in the dollar.

IMHO though, so who know's. I thought oil was going to hit $100 by September:(
 
Ikari said:
We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.
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It amazes me how many people are still tricked by fake lines in the sand and the network news.
 
Ikari said:
We haven't been on a good path for quite some time. This all started with Clinton, he really started things rolling. Bush made them worse, and Obama is running with the ball now. We haven't had any responsible form of government for a good long while now. Clinton, Bush, Obama....peas in a pod.
Click to expand...




For the thing I greatly feared has come upon me. And what I dreaded has happened to me, I am not at ease, nor am I quiet; I have no rest, for trouble comes. - Job 3:25,26
 
Is it time to hang Paulson and Bernake yet?

[ame=http://www.liveleak.com/view?i=55c_1248286761]LiveLeak.com - Bernanke: ?I Don?t Know? Which Foreign Banks Were Given Half a Trillion Dollars[/ame]
 
Goldenboy219 said:
Why????:thinking

$500 billion is entirely "notional", and hence reflects information used to calculate interest for payment streams.
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Why? We don't need a reason. Lets just hang um.
 
Dr_Patrick said:
I don't know why the Obama Administration seems to think that the US has a bottomless pocket book. I don't see how this could possibly end good and what's worse is that a lot of the people cheering this most likely either have little to no understanding about the possible ramifications or they just don't care.
Click to expand...

Nobody is "cheering this", and this article was mostly chicken little fear mongering.

(Most of these bailout programs were started under Bush, btw.)

But this is really "worst case scenario" --If absolutely nothing works and we head into a depression.

If the worst actually happened, the country would basically have to start over anyway, so this "23 trillion" is virtually meaningless.
 
dirtpoorchris said:
Why? We don't need a reason. Lets just hang um.
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Bernanke has proved to be a critical player in an economic recovery. Of course, that is just my opinion....:2razz:
 
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