Bank bailout escalates

Bank bailout escalates

It looks like the American government's bailout of the banks is going to cost twice as much as we were first told.

According to the Congressional Budget Office blog, the Troubled Asset Relief Program or TARP will cost $34 billion. "CBO's current estimate of the cost of the TARP's transactions is $15 billion higher than the $19 billion estimate shown in the agency's previous report. That increase in the estimated cost stems primarily from a reduction in the market value of the government's investments in AIG and General Motors."

In addition to TARP, the Fed provided banks and other companies as much as $1.2 trillion of public money. Bloomberg reports: "The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress." At the same time, the rest of the country was going down the gurgler.

The size of the bailout for the banks is important because it has now become a rallying point for the Occupy Wall Street Movement. And it's not like they have paid the money back either. As shown in this info-graphic here, AIG received $68 billion in TARP funds but the US Treasury has so far only recouped $16 billion.

Photo source 401K


no comment untill now

Add your comment now