Total Cost of Bailout: $23.7 Trillion?

[amborin]

SIGTARP Barofsky says U.S. on the hook for $23.7 Trillion in bail out!

As massive and as important as TARP is on its own, it is just one part of a much broader Federal Government effort to stabilize and support the financial system. Since the onset of the financial crisis in 2007, the Federal Government, through many agencies, has implemented dozens of programs that are broadly designed to support the economy and financial system. The total potential Federal Government support could reach up to $23.7 trillion.

In the nine months since the Emergency Economic Stabilization Act of 2008 (“EESA”) authorized creation of the Troubled Asset Relief Program (“TARP”), the U.S. Department of the Treasury (“Treasury”) has created 12 separate programs involving Government and private funds of up to almost $3 trillion. From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase “toxic” assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity.

snip

Mr. Barofsky also estimated the government's potential exposure to programs aimed at fixing the financial crisis at $23.7 trillion. To get to that figure, Mr. Barofsky combined direct spending with all the government guarantees and programs and assumed the "gross exposure" the government could face if all the programs were tapped to their fullest potential. "These numbers may have some overlap, and have not been evaluated to provide an estimate of likely net costs to the taxpayer," his report noted.Bloomberg:

U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.
The Treasury’s $700 billion bank-investment program represents a fraction of all federal support to resuscitate the U.S. financial system, including $6.8 trillion in aid offered by the Federal Reserve, Barofsky said in a report released today.
“TARP has evolved into a program of unprecedented scope, scale and complexity,” Barofsky said in testimony prepared for a hearing tomorrow before the House Committee on Oversight and Government Reform.

snip

Barofsky's report here:

http://www.economicpopulist.org/files/barofskytestimony07202009.pdf


http://www.economicpopulist.org/content/holy-batman-sigtarp-barofsky-says-us-hook-237-trillion-bail-out

[LetsgoWings13]

1. Let's hope it NEVER comes to that! that number is outrageous!!!

[DJ13]

2. All according to plan

Create massive fiscal obligations by throwing all the government's money at the wealthiest with few strings, then claim theres no money left so the only way out is to cut back on programs that only benefit the poor and the elderly.

[Make7]

3. TARP Inspector General Debunks His Own False $23 Trillion Bailout Estimate

TARP Inspector General Debunks His Own False $23 Trillion Bailout Estimate

Jul 22nd, 2009

Yesterday, TARP Inspector General Neil Barosky released a report which crudely tallied up the cost of every economic rescue program proposed during the current crisis — including those that have been discontinued or never even began — to state that the total scope of all financial rescue programs comes to about $23.7 trillion. Cable news hosts ran wild with the report, using it to claim that taxpayers will “ultimately” wind up paying $23 trillion in “bailouts.”

The number continued to be cited on cable last night and this morning, with Fox News even claiming that $23 trillion will be the final cost of TARP alone. But Barofsky himself appeared on CNN to explain that the actual outstanding amount for the financial rescues is closer to $3 trillion, including loans that have yet to be repaid.


http://thinkprogress.org/2009/07/22/barofsky-debunks-23-trillion/

www.financialstability.gov/docs/09%20OFS_CitizensReport%20MAR2.pdf

[amborin]

4. Mother Jones says $14 trillion; they are trustworthy:

"The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here. Below, a guide to the pieces of the puzzle:

Treasury Department bailout programs

Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion .

Public-Private Investment Fund: This joint Treasury-Federal Reserve program bought toxic assets from banks and brokerages—as much as $5 billion of assets per firm. According to SIGTARP, the government's potential exposure from the PPIF is between $500 million and $1 trillion .

TARP: As part of the Troubled Asset Relief Program, the Treasury has made loans to or investments more than 750 banks and financial institutions. $650 billion has been paid out (not including HAMP; see below). As of December 21, 2009, $117.5 billion of that has been repaid.

Government-sponsored enterprise (GSE) stock purchase: The Treasury has bought $200 million in preferred stock from Fannie Mae and another $200 million from Freddie Mac to show that they "will remain viable entities critical to the functioning of the housing and mortgage markets."

GSE mortgage-backed securities purchase: Under the Housing and Economic Recovery Act of 2008, the Treasury may buy mortgage-backed securities from Fannie Mae and Freddie Mac. According to SIGTARP, these purchases could cost as much as $314 billion .

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Citigroup asset guarantee: In this joint Treasury, Federal Reserve, and FDIC program, the government agreed to cover potential losses to a Citigroup asset pool worth $301 billion .


T-bill auctions to fund the Fed: In November 2008, the Treasury announced that it would borrow $260 billion to fund the Supplementary Financing Program, whose proceeds were deposited with the Federal Reserve.

TARP overpayment: This June, the Congressional Budget Office estimated that the federal government would lose $159 billion from its TARP loans and investments due to changes in their market value. (So far, Treasury has earned $14.4 billion in dividends from TARP.)

Bank of America asset guarantee: In this joint Treasury, Federal Reserve, and FDIC program, the government agreed to cover potential losses to a Bank of America asset pool worth $118 billion. Bank of America has withdrawn from the program and has paid the government $425 million in compensation.

Potential international fund liabilities: In April, the United States committed up to $100 billion to fund the International Monetary Fund's lending and ensure that it "has adequate resources to play its central role in resolving and preventing the spread of international economic and financial crises."

HAMP: The Home Affordable Modification Program offers financial incentives to lenders to modify home loans. $75 billion in federal funds has been committed; $50 billion of that comes from TARP is set aside to modify mortgages not owned or guaranteed by Frannie Mae, Freddie Mac or other government-sponsored entities.

Treasury exchange stabilization fund: A temporary program to insure the holdings of publicly offered money market mutual funds.

GSE credit facility program: Additional credit made available to Fannie Mae and Freddie Mac. Expires December 31, 2009.



Federal Reserve bailout programs

Commercial Paper Funding Facility: With the support from the Treasury, the Fed established the CPFF in October 2008 to increase the availability of short-term debt (commercial paper) funding. Up to $1.8 trillion was earmarked for the program.

Mortgage-backed securities purchase: In 2009, the Fed earmarked up to $1.25 trillion to buy investments based on home loans.

Term Asset-Backed Securities Loan Facility: TALF provides financing to investors who are buying asset-backed securities. In February 2009, the Fed and Treasury announced an expansion of the program to generate up to $1 trillion in new lending.

Foreign Central Bank Currency Liquidity Swaps: The Fed has provided $755 billion for currency liquidity swaps with foreign central banks.

Money Market Investor Funding Facility: The MMIF was established in October 2008 to provide loans for investors buying certificates of deposit and commercial paper. According to SIGTARP, $600 billion was allocated for the program.


Treasury Purchase Program: In March 2009, the Fed was authorized to purchase up to $300 billion of treasury securities.


GSE Program: In March 2009, the Fed increased its purchases of debt from government-sponsored enterprises (Fannie Mae and Freddy Mac) from $100 billion to $200 billion.

Primary Dealer Credit Facility: The PDCF provides overnight loans to primary dealers (financial firms that can engage in direct transactions with the federal government). The Fed allocated $147.7 billion for it in 2009.

ABCP MMMF liquidity facility: The Asset-Backed Commercial Paper (ABCP) Money Market Mutual Fund (MMMF) Liquidity Facility (whew!) provides loans to financial institutions purchasing commercial paper from money market mutual funds. According to SIGTARP, the Fed allocated $145.9 billion for the program in 2009.

JPMorgan Chase/Lehman Brothers: In September 2008, the Fed gave JPMorgan Chase $148 billion in help the near-bankrupt Lehman Brothers.

Open Market Operations: In September 2008, the Fed injected $125 billion into the market by purchasing securities and repurchase agreements, or repos, in which primary dealers borrow cash from the fed.

Tri-Party Repurchase Agreements: The Fed provided $124.6 billion for this type of repo in 2009.

Primary Credit: The Fed provided $112 billion to offer loans at a discounted rate to eligible institutions in 2009.


Temporary Reserves: Between August and September 2007, the Fed made $93 billion of temporary reserves available for loans to financial firms.

Single-Tranche Repurchase Agreements: In 2009, the Fed offered a total of $80 billion for short-term loans to holders of mortgage-backed securities.

Term Auction Facility: Under TAF, the Fed auctions short-term loans to financial institutions. The amount of loans offered has varied widely; between December 2009 and January 2010, $75 billion in loans will be available.

AIG preferred stock interests, credit, and loan: The Fed provided $53 billion to the struggling AIG in various forms between 2008 and 2009.


AIG Securities Lending Facility: In October 2008, the Fed authorized the Federal Reserve Bank of New York to borrow up to $37.8 billion in securities from AIG.


Maiden Lane II and III (AIG): In 2008, the Fed authorized its New York branch to form three limited liability companies: Maiden Lane, Maiden Lane II, and Maiden Lane III. It provided $52.5 billion to Maiden Lane II and III to assist AIG.

Maiden Lane I (Bear Stearns): The Fed provided $29.8 billion to Maiden Lane I to acquire Bear Stearns' assets and facilitate its merger with JPMorgan Chase.


TSLF: The Term Securities Lending Facility offers Treasury collateral to the Federal Reserve Bank of New York so it can auction weekly loans to financial institutions. $25 billion in loans will be available between November 2009 and January 2010.

TOP: The Term Securities Lending Facility Options Program allowed primary dealers to get TSLF loans in exchange for collateral. At the time of the program's termination in June 2009, $50 billion in loans had been offered.

Expansion of system open market account securities lending: In July 2009, the Fed increased its limit for loans of securities to brokers from $3 billion to $5 billion, for a total of $36 billion in new lending.

JPMC/Bear Stearns Loan: The Fed provided a $12.9 billion bridge loan to JPMorgan Chase during its acquisition of Bear Stearns.


http://motherjones.com/politics/2009/12/behind-real-size-bailout

[RandomThoughts]

5. And at least once a week, I hear someone on the news saying Tarp has been repaid.

They give the indication that the entire bailout has been repaid, when usually talking about one part of a company.

Not to mention, much of the Tarp money went to banks in other countries, and maybe even a couple of guys heading to Switzerland arested in Italy (according to news story) with billions in a briefcase.

And not to long ago, we heard that the government does not even know where it all went.



It was theft.