Bailout Total: $29.616 Trillion Dollars

From the Big Picture courtesy of Eschaton:

The researchers took all of the individual transactions across all facilities created to deal with the crisis, to figure out how much the Fed committed as a response to the crisis. This includes direct lending, asset purchases and all other assistance. (It does not include indirect costs such as rising price of goods due to inflation, weak dollar, etc.)

The net total? As of November 10, 2011, it was $29,616.4 billion dollars — (or 29 and a half trillion, if you prefer that nomenclature). Three facilities—CBLS, PDCF, and TAF— are responsible for the lion’s share — 71.1% of all Federal Reserve assistance ($22,826.8 billion).

And

The amount of overnight lending reflects how broken our financial system really is. A well capitalized, moderately leverage system does not require this massive liquidity from a central bank — interbank lending should be sufficient. What the data reveals is that the financial sector remains dangerously under-capitalized and overleveraged.

More here.

Let's put this massive number in perspective: the US debt, that is, the amount of money owed by the federal government, is only fifteen trillion dollars. To be fair, my understanding is that most of this bailout money is considered to be loans, which would mean that it's not counted as part of the debt, which I suppose is obvious, given that the bailout money is nearly twice what the US government owes. But just because it's not on the official ledger in red ink doesn't mean it's not a big fucking deal.

Some questions.

How the fuck are the banks going to pay back all this money? I mean, it really does sound like the only thing holding the banking system together is a veritable mountain range of government cash. Indeed, it sounds as though the banking system essentially is government money. So the banks have nothing except government money with which to do business. Is it even possible to ever make enough on loans and investments to pay back the principle? How long will it take? Decades? And if the banking system is, in fact, all government money, why the hell doesn't the government just take all these banks into receivership, fire all the crooked assholes who got us into this mess, and start making very low cost loans to individuals and businesses in order to jump start demand?

It is now clear that the financial crisis of 2007 was far, far worse than anybody was letting on at the time, and at the time it looked pretty fucking bad. And now the banks have tied up an amount of money worth twice the national debt in their system, a rather significant percentage of the GDP, and all those dollars don't appear to be doing a damned thing to get the economy going again--of course, executive bonuses continue to be big, big, big.

This is just too fucked up for me to even really comprehend. Politicians quibble about how to cut Social Security and Medicare while the bankers sit on twice the national debt, partying down on Wall Street like it was 1929. Can it really be this bad?

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