OK, We'll Stop Printing Money Now
The White House is saying that they may not use all of the bailout money before January 20 and that they will offer about $350 billion of it to President-elect Obama, in a magnanimous gesture, for him to use it as he sees fit. How gracious! The Bush Administration has only drawn $4 TRILLION dollars out of the Treasury and they're letting Obama handle the rest!
Given the speed at which the federal government is throwing money at the financial crisis, the average taxpayer, never mind member of Congress, might not be faulted for losing track.
CNBC, however, has been paying very close attention and keeping a running tally of actual spending as well as the commitments involved.
Try $4.28 trillion dollars. That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources.
Not only is it a astronomical amount of money, it's a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and new releases. Strictly speaking, not every cent is directed a result of what's called the financial crisis, but it arguably related to it.
There's a chart at the link if you want to see for yourself everything you've bought this year. By the way it hasn't done the trick yet.
I think at this point, stripping Henry Paulson of his authority to spend more cash, with Ben Bernanke thrown in for good measure, isn't an option but a duty. And Chuck Grassley's call for the newly minted oversight board to investigate conflicts of interest among all the Goldman Sachs execs serving as the ladlers of corporate cash during the bailout is absolutely warranted. However, this oversight is coming at the END of the process, not the beginning. With four trillion already passed out, it's not like putting the brakes on the giveaways is going to make much of a difference today. This is not to say we shouldn't be investigating and scrutinizing what amounts to theft, as well as building a new regulatory structure for the future (yes, listen to Eliot Spitzer on this one - setting aside his personal life he's probably the most knowledgeable person in America about what needs to be done).
And there's, of course, a double-edged sword to all the newfound vigor on the right, from Grassley and James Inhofe and others, to watch the Treasury Department, after leaving the barn door open to the tune of four trillion. This is but a prelude to the wave of fiscal austerity that we're going to be hearing 24-7 from those who will claim we just can't afford health care and investments in alternative energy and infrastructure and early childhood education. We actually need some immediate relief right now, for state and local governments and the unemployed, and my concern is that this retrospective shock at the bailout price tag from Republicans will be used as an excuse to deny that, sending us into the downward spiral we saw in 1930 and 1931, when too much dithering and not enough action created an even bigger economic hole.