This is going to be one costly success. At this morning's Washington Post reports, the Geithner plan may top $1.5 trillion:
The gravity of the financial crisis confronting the Obama administration will come into stark focus today when officials unveil a three-pronged rescue program that may commit up to $1.5 trillion in public and private funds, and possibly more, lawmakers and other officials said.That's some big money. No wonder President Obama's reduced to pleading "catastrophe" with every breath he takes.
In announcing the plan, Treasury Secretary Timothy F. Geithner will not ask Congress for more funds than the roughly $350 billion that remain in the Treasury Department's original rescue package for the financial system, though congressional sources said such a request could come later if the new programs are unsuccessful. The rest of the money would come from other government agencies, such as the Federal Reserve, as well as private-sector contributions.
A senior administration official warned last night that the ultimate cost to taxpayers has not been determined. Several of the programs have not been finalized, and most are designed to ultimately return money to taxpayers.
Geithner plans to announce a public-private partnership that would seek to finance the purchasing of toxic bank assets that are at the heart of the credit crisis, officials and congressional sources said. These sources briefed by Treasury officials said the program may initially raise $250 billion to $500 billion in public and private funds to offer low-cost financing to encourage investors to buy the toxic assets. An administration official said the proposal is still subject to a public review and may not take final shape for several weeks.
A second initiative will broaden the scope of a Federal Reserve program aimed at unclogging the markets for auto, student and other consumer loans. That initiative may expand to as much as $1 trillion, using $100 billion from the Treasury's rescue funds, and include aid for commercial real estate markets.
See also, Powerline:
Have you noticed, too, that as Obama tries ever more desperately to sell his porkapalooza, his claims for it expand? Originally he said it would save or create 3 million jobs. Then for a while it was 3-4 million. Tonight Obama's consistent claim was that the porkfest will create 4 million jobs.I noticed, but hey, you've got to bump up the need to justify the price ...
How depressing this has all become. I don't understand all this spending when you: A) Don't know if it will be successful B) Can't guarantee that it will ever be repayed and C) Have no idea what the ultimate cost will ever be.
ReplyDeleteWhy can't we just accept failure? Perhaps the country needs a depression to purge itself and start a new. God knows it was painful for those that lived through the first one, but many survived. I know it sounds draconian to say as much but if we don't endure the pain, then we certainly pass on a lot of undeserved suffering to our children and grandchildren in the future. I guess I am being naive, but I would prefer to protect my children than whether or not I can live in an over-priced house and drive cars that I don't need or use the latest communication device. Seems to me we are selfish, but then again the alternative, staring into the abyss, is scary as well. The bottom line is we don't have the money and are borrowing against this country's future which I believe will ultimately be our ruin.
Actually, Lipskip, I don't think things are going to be as bad as the Democrats make it. We'll have a deep recession, and we'll recover.
ReplyDeleteI don't think it has to be as bad as the government has made it. I just think all this spending, bailouts and borrowing is going to prolong the pain. And pass it on. We were already 10 trillion in debt before this mess. The Social Security ponzi scheme and medicare/medicaid will soon fail or cost us dearly. The Dems universal health care. How is that paid for?
ReplyDeleteI'm no economist but I'd prefer failures. We could have used the trillion dollars in bank and auto bailouts to stimulate the economy in more efficient ways.
I do think things are bad economically not only hear but around the globe. But I think there is so much covering of their rear ends going on in the collective DC that no one is willing to do what is needed.
ReplyDeleteI think it goes all the way back to the 90's when the gov was telling banks they needed to make housing loans to people who couldn't afford it. Though I don't think that's the sole problem. The buy it today pay for it tomorrow is a factor too.
All that said, I don't think this put-the-printing-press-in-overdrive plan is going to solve the problem. I think it'll just make it worse in the long run.
Looking at ExactPrice and the real time stat on gold while Geithner was giving his "may work" plan makes me think others were feeling the same thing about printing press inflation. Tells me people are looking for a safety net.