When historians write the book on the financial crisis, the hardest question to answer will be: Why did we make such a big deal over the $700 billion TARP?
CNN: There was $29 billion for Bear Stearns, $345 billion for Citigroup. The Federal Reserve put up $600 billion to guarantee money market deposits and has aggressively driven down interest rates to essentially zero.
The list goes on and on. All told, Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps to prop up the economy.
Total price tag so far: $7.2 trillion. Now comes President-elect Barack Obama’s economic stimulus plan, some details of which were made public on Monday. The bill is getting awfully close to $8 trillion.
Put another way, our total GDP is around $14 trillion, so we’re nearing on 60% (and of course, this is excluding the trillions the government spends in the normal course of business). In the last year, we’ve pretty much spent our entire economy on rescuing our economy. The good news: spending two thirds of the GDP is what some economists have said is really required to do a bailout right. So… maybe we’re there? We can always hope.
Our $7.4 Trillion Bailout