So the intrepid host of this blog has been in a little bit of a funk lately, writer’s block if you will. But what a story to share as a way to get back into the blogging scene. Most of you may have already read about this but given the number of riots that haven’t ensued yet, my guess is: you may not.
Last week, I read a shocking report by Bloomberg News detailing how the Federal Reserve ran up a massive deficit that gave $1.2 trillion in low-cost loans to the largest banks in America and Europe, as the 2008 financial collapse peaked. Yes, my friends. That’s $1.2 trillion with a T! $1.2 trillion loaned out at below-market rates. To put that figure in some perspective, that sum roughly makes up our entire federal debt and is equivalent to approximately one-third of all the assets owned by the Federal Reserve. One-third. That’s not a typo.
The largest aspect of the bailout, the Troubled Asset Relief Program (TARP), dedicated close to half a trillion dollars to support large financial and auto companies. That included billions given to AIG (the
crooks financial company responsible for selling mortgage-backed securities) and Fannie Mae and Freddie Mac (the government-backed companies which sold, bought, and insured mortgages). In a report published last year, the Obama administration predicted that the government will lose $17 billion on its TARP investments in car companies, plus another $46 billion on housing programs including the Home Affordable Modification Program. Those losses may be balanced by profits the Treasury made from its loans to financial institutions.
In the case of its secret lending program, the Fed expects to recoup all the money it lent out. Also according to Bloomberg, the Feds have indicated that there were no credit losses on any of its bailout loans and that, in some instances, billions of dollars of profit were generated from interest and fees from the loans. The jury is still out on that, and we will have to see how much recovery the federal government receives from its lending.
Regardless of how much will eventually be repaid, one thing is certain: the amount of money the federal government loaned out (or outright gave away) during the 2008 financial meltdown is mind-blowing and maddening. Before being perverted by corporate interests, this is why the Tea Party was first founded and why the Occupy Wall Street movement is finally getting its legs. The fact that so much taxpayer money was doled out unconditionally and with no accountability is one of, if not the most, outrageous example of robbery we have ever experienced. I’m trying to form a coherent thought, but my efforts are muddled by the shocking nature of this news.
So much for making my triumphant return to the blogosphere.