How much so far? Try $2.5 trillion.
This comes out as Bloomberg L.P. has filed a lawsuit to force the Federal Reserve to provide more information about which companies are receiving money and what assets have been pledged to get the money. Although the bailout was initially approved amid claims that there would be total transparency, the reality has fallen far short of that.
Here's how BailoutSleuth comes up with its total:
- $170 billion for banks who sold preferred stock to the government
- $150 billion given to AIG -- $85 billion initially, another $25 billion, and another $40 billion
- $2 trillion in emergency loans from the Federal Reserve to banks under 11 different programs that are separate from the TARP program, and which didn't require approval by Congress
The total so far is at $2.32 trillion. And banks can still apply to get another $80 billion in aid. And... The tax code was also changed by the Treasury Department, which some say could give merging banks a savings of $140 billion in taxes. In total, the government is basically prepared to hand out $2.5 trillion to banks.
We're not done yet. These numbers don't include the funds the Treasury Department has offered up to help Fannie Mae, Freddie Mac, and the new HOPE for Homeowners program, totaling $500 billion. So a total of $3 trillion so far!!!
And I'm not naïve enough to think it's stopping there. I predict that in less than a month, the Treasury will tell us that we just haven't approved enough, and need more to make the bailout "as effective as possible." Mmmm-hmmmm.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.