FED PLEDGES TOP $7.4 TRILLION

November 24th, 2008

Adrift in a squall. Snapped mast. No rudder. Taking on water.

Via: 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, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

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.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

2 Responses to “FED PLEDGES TOP $7.4 TRILLION”

  1. pdugan says:

    USDX losing but still in range, it´ll take more than sensible mathematics to break the support, I think. Who will blink first, the US institutions unwinding the CDS bubble or the Chinese Central Bank?

  2. anothernut says:

    $7.4 trillion/300 million (population of US)
    = $24,666.67 for every man, woman, and child in America. Wouldn’t THAT be a powerful stimulus package? Imagine a family of 5 currently bringing in $60k/year (somewhere in the ballpark of the national average), suddenly getting $123k in the mail. Now THAT would be Merry F’ing Christmas!!!

    But of course, that’s just silly. As we all know, the top 1/10th of 1% know best how to handle $7.4 trillion. After all, they’ve done such a great job so far! HA!

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