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July 22, 2011

GAO audit: Fed bailouts came to $1 trillion

The GAO audit of the Fed's bailouts is out.

From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars in emergency loans to the financialsector to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financialsystem. The scale and nature of this assistance amounted to anunprecedented expansion of the Federal Reserve System’s traditionalrole as lender-of-last-resort to depository institutions.

Even if you believe the Fed's extraordinary actions were necessary, as you should, it's hard to disagree with Vermont Sen. Bernie Sanders, who said, "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

HT Big Picture.

Posted by Jay Hancock at 8:49 AM | | Comments (5)
        

Comments

What?? No mention of the $16Trillion in "emergency foreign aid" during the same period?

Mr. Hancock... Why should we believe the FED's actions were necessary?

"Even if you believe the Fed's extraordinary actions were necessary, as you should"

What kind of statement is that?

Even if you believe in privatizing gains and subsidizing losses....

Who exactly do you think is one the hook for that $1,000,000,000,000?

Too bad the American people didn't have a say in how their money was spent.

Yeah, it was $16 trillion. Bernie Sanders released a statement on it. And it's all over Twitter. Probably a good example of why people are turning away from the mainstream media.

The Federal Reserve loaned out SIXTEEN TRILLION. Read the Fed audit led by Senator Sanders.

$16 trillion was the amount of the Fed loans to both foreign and domestic financial institutions and corporations.
Please see Senator Sanders' press release about the audit:
http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

In the interest of accuracy, please change the title of your post which seems somewhat misleading.

The title states 'Fed bailout came to $1 trillion' (which seems to suggest an amount approximately equal to a trillion), whereas the quote you cite states: 'Reserve Banks provided more than a trillion dollars' (greater than a trillion). Again, the final amount was $16 trillion. That is 16 times more than the amount the title of your post implies.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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