Great news: Bail outs could cost us $23 trillion

I'm beginning to like this fellow Neil Borofsky more and more. Borofsky is the Inspector General for the TARP bailout and has also been placed in charge of overseeing all other federal bailouts that have been approved by Congress or ordered by the administration.

Borofsky has already had a run in with Treasury Secretary Geithner who tried to de-gonad the IG when Borofsky requested some documents on TARP that Geithner was not willing to part with. Borofsky raised a stink in Congress over the dispute and Geithner was forced to climb down.

It is evident this guy takes his job very seriously and pulls absolutely no punches. Proof of that will come today when he delivers a stark, rather frightening report to Congress on just how much American taxpayers are on the hook for if all these bailouts go south.

Eamon Javers of Politico gives us a preview of that testimony:

A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government's watchdog over the effort says - a staggering amount that is nearly double the nation's entire economic output for a year.

If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.

For the government to be on the hook for the total amount, worst-case scenarios would have to come to pass in a variety of federal programs, which is unlikely, says Neil Barofsky, the special inspector general for the government's financial bailout programs, in testimony prepared for delivery to the House oversight committee Tuesday.

[...]

Even the Moon landings and the New Deal didn't come close to $23 trillion: the Moon shot in 1969 cost an estimated $237 billion in current dollars, and the entire Depression-era Roosevelt relief program came in at $500 billion, according to Jim Bianco of Bianco Research.

The annual gross domestic product of the United States is just over $14 trillion.

A lot of bad things would have to happen for that worst case scenario to saddle us with a $23 trillion bill. But the worst case doesn't have to happen for us to be on the hook for even half that amount.

Someday, our grandchildren are going to look us in the eye and ask "What were you thinking?" Would telling them that you didn't vote for Obama or the Democrats matter?

Not at that point.












I'm beginning to like this fellow Neil Borofsky more and more. Borofsky is the Inspector General for the TARP bailout and has also been placed in charge of overseeing all other federal bailouts that have been approved by Congress or ordered by the administration.

Borofsky has already had a run in with Treasury Secretary Geithner who tried to de-gonad the IG when Borofsky requested some documents on TARP that Geithner was not willing to part with. Borofsky raised a stink in Congress over the dispute and Geithner was forced to climb down.

It is evident this guy takes his job very seriously and pulls absolutely no punches. Proof of that will come today when he delivers a stark, rather frightening report to Congress on just how much American taxpayers are on the hook for if all these bailouts go south.

Eamon Javers of Politico gives us a preview of that testimony:

A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government's watchdog over the effort says - a staggering amount that is nearly double the nation's entire economic output for a year.

If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.

For the government to be on the hook for the total amount, worst-case scenarios would have to come to pass in a variety of federal programs, which is unlikely, says Neil Barofsky, the special inspector general for the government's financial bailout programs, in testimony prepared for delivery to the House oversight committee Tuesday.

[...]

Even the Moon landings and the New Deal didn't come close to $23 trillion: the Moon shot in 1969 cost an estimated $237 billion in current dollars, and the entire Depression-era Roosevelt relief program came in at $500 billion, according to Jim Bianco of Bianco Research.

The annual gross domestic product of the United States is just over $14 trillion.

A lot of bad things would have to happen for that worst case scenario to saddle us with a $23 trillion bill. But the worst case doesn't have to happen for us to be on the hook for even half that amount.

Someday, our grandchildren are going to look us in the eye and ask "What were you thinking?" Would telling them that you didn't vote for Obama or the Democrats matter?

Not at that point.