Bloomberg: US could lend as much as $7.4 trillion
"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," according to an estimate by Bloomberg News.
Financial institutions have purportedly already tapped $2.8 trillion in credit lines from the Treasury. The loans are the largest provided in an economic emergency since the New Deal of the 1930s, in the wake of the Great Depression.
"Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis," the wire notes.
Regulators have revealed few details about the recipients of aid under the Troubled Asset Relief Program -- which was supposed to be used to buy up troubled mortgage assets from banks. To date, the package has not been used for this purpose.
“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, told Bloomberg. “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.”
Bloomberg News "tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort."
"The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14," the wire added.
FULL STORY HERE.