Monday, November 24, 2008

Federal Reserve and U.S. Treasury Offer Half of US GDP to Wall Street Banks

I've been deliberating about posting so soon again. The next few blogs I'd like to take my time in preparing for this blogspot. I don't want to reveal any of my ideas and I don't particularly care about reposting a blog from another blogspot site, but I felt compelled to post excerpts from this news article. This appears in Jesse's Café Américain.

Fed Pledges Top $7.4 Trillion to Ease Frozen Credit
By Mark Pittman and Bob Ivry

Nov. 24 (Bloomberg) - The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

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