I think I figured out where those "$100 Trillion bailout" numbers come from...

[Integral]

This is a service post and a service thread. I'm only going to do this once.

We have seen claims that the Federal Reserve has extended enormous sums of money -- $9 trillion, $47 trillion, $100 trillion -- in "bailouts" to financial institutions over the past three years.

Consider the following snippet from this site:

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

These are extraordinarily large numbers and are far out of line with the figures that I'd expect to see, by several orders of magnitude. So I dug into that GAO report.

The GAO's numbers are found by aggregating all Federal Reserve loans to these companies, irrespective of maturity. This is important. I shall give an example, one used in the report itself. An overnight loan of $10 billion that was renewed daily at the same level for 30 business days would result in an aggregate amount borrowed of $300 billion although the institution, in effect, only borrowed $10 billion over 30 days.

That's where the huge numbers come from. That's how a $10 billion loan becomes a "$300 billion bailout".

We knew they were a sham; now we know why. It really is that simple.

 

[Cutlass]

We've seen variations of this before. Like claiming that all of the bailouts that could in theory have been made were actually money outstanding. Instead of the reality, in which much of it was never actually disbursed in the first place, and most of what was was repaid afterward.

 

[pi-r8]

So is this like how deficit hawks claim that the US government has $100 trillion of "future unfunded liabilities"?

 

[Cutlass]

So is this like how deficit hawks claim that the US government has $100 trillion of "future unfunded liabilities"?

Not all of it, no. Some of them add up all of the future obligations of pensions, military benefits, entitlements, the works, out to the end of time. But ignore the revenue coming in to pay for those things.

 

[JollyRoger]

You should see how messed up the average deficit hawk's personal finances are. Millions in future unfunded liabilities - for generations to come.