Estimates of Total Taxpayer Support for Financial System Keep Rising
Special Inspector General of the Troubled Asset Relief Program (TARP) Neil Barofsky released a report earlier this week that claimed that the "outstanding balance of overall Federal support for the nation's financial system" had increased more than 23% over the past year, from $3.0 trillion to $3.7 trillion.
This increase comes despite the fact that there has been a $300 billion decline in TARP commitments over the past year.
So, where are these increases in taxpayer commitments coming from?
-mortgage guarantees to support the housing market
-government guarantees to provide capital to Freddie Mac and Fannie Mae
Mr. Barofsky went on to make the point that total government commitments have increased the amount of "a fully deployed TARP program" ($700 billion) over the past year, "largely without congressional action." He also notes that these increases have come despite the fact that the banking crisis has "abated from its most acute phases."
The $3.7 trillion figure means that every man, woman and child in the United States is on the hook for over $12,000 in total risk thanks to the financial meltdown that took place in 2008.
The burning question right now is - how much higher will total taxpayer commitments rise over the next few years?
Source: Reuters.com - US Financial System Support Up $700 Bln in Past Year
Filed under: The Economic Meltdown