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RANDY SHAW: U.S. bailout now tops $7 trillion

by rshaw

KREM.com

Posted on October 19, 2009 at 1:12 PM

It may never have to shell out every cent of it, but the U-S has now pledged a staggering $7-trillion dollars to stop the financial meltdown. That's equivalent to $24,000 for every man, woman and child in America.

The Associated Press estimates the figure at $7-trillion and Bloomberg estimates the figure at $7.7-trillion.

The total committment dwarfs the original plan by the Treasury Department to shore things up with a $700-billion dollar bailout. And now there is a second plan to approve another $800-billion dollars because the first bailout amount wasn't enough.

Counting up the $300-billion dollar pledge to Citigroup, $1.4-trillion from the FDIC to guarantee bank-to-bank loans, purchase as much as $2.4-trillion in short-term notes, hundreds of billions for Fannie Mae and Freddie Mac, not to mention the long list of bailouts of such firms as American International Group or AIG and the printing presses at Treasury are rolling some heavy overtime.

The federal government admits it only hopes this will be enough. It doesn't know how much collateral actually backs up the taxpayer dollars being spent nor will it identify many of the banks standing in line for a handout.

Add to all this, the failing U-S auto industry and the pending bailout next year to save two million American jobs.

It is unprecendented and shaky ground we now tread. And no one can be sure if anything done so far will actually fix the problem. That's the one guarantee even the federal government won't make.

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