Got an extra $17,000 laying around to give to the banks and Wall Street. Congress thinks you do. If you aren't in debt yet, you will soon be thanks to them.
|BAILOUT TYPE||COST TO TAXPAYERS|
|Proposed Treasury Department Legislation||$700 billion +|
|Bear Stearns Financing||$29 billion|
|Fannie Mae and Freddie Mac Nationalization||$200 billion|
|AIG Loan and Nationalization||$85 billion|
|Federal Housing Administration Housing Rescue Bill||$300 billion|
|Mortgage community Grants||$4 billion|
|JP Morgan Chase Repayments||$87 billion|
|Loans to Banks via Fed's Term Auction Facility||$200 billion+|
|Loans from Depression-era Exchange Stabilization Fund||$50 billion|
|Purchases of Mortgage Securities by Fannie Mae and Freddie Mac||$144 billion|
|COST PER HOUSEHOLD||$17,064+|
|Discount Window Loans to Financial Institutions||UNSPECIFIED|
Numbers via Reuters
Here are further details of actions, proposals and amounts:
- Up to $700 billion to buy assets from struggling institutions. The plan is aimed at sopping up residential and commercial mortgages from financial institutions but gives Treasury broad latitutde.
- Up to $50 billion from the Great Depression-era Exchange Stabilization Fund to guarantee principal in money market mutual funds to provide the same confidence that consumers have in federally insured bank deposits.
- The Fed committed to make unspecified discount window loans to financial institutions to finance the purchase of assets from money market funds to aid redemptions.
- At least $10 billion in Treasury direct purchases of mortgage-backed securities in September. In doubling the program on Friday, the Treasury said it may purchase even more in the months ahead.
- Up to $144 billion in additional MBS purchases by Fannie Mae and Freddie Mac. The Treasury announced they would increase purchases up to the newly expanded investment portfolio limits of $850 billion each. On July 30, 2008, the Fannie portfolio stood at $758.1 BILLION with Freddie's at $798.2 BILLION.
- $85 billion loan for AIG, which would give the Federal government at 79.9 percent stake and avoid a bankruptcy filing for the insurer. AIG management will be dismissed.
- At least $87 billion in repayments to JPMorgan Chase for providing financing to underpin trades with the units of bankrupt investment bank Lehman Brothers. Paulson said over the weekend he was adamant that public funds not be used to rescue the firm.
- $200 billion for Fannie Mae and Freddie Mac. The Treasury will inject up to $100 billion into each institution by purchasing preferred stock to shore up their capital as needed. The deal puts the two housing finance firms under government control.
- $300 billion for the Federal Housing Administration to refinance failing mortgage into new, reduced-principal loans with a federal guarantee, passed as part of a broad housing rescue bill.
- $4 billion in grants to local communities to help them buy and repair homes abandoned due to mortgage foreclosures.
- $29 billion in financing for JPMorgan Chase's government-brokered buyout of Bear Stearns in March. The Fed agreed to take $30 billion in questionable Bear assets as collateral, making JPMorgan liable for the first $1 billion in losses, while agreeing to shoulder any further losses.
- At least $200 billion of currently outstanding loans to banks issued through the Fed's Term Auction Facility, which was recently expanded to allow for longer loans of 84 days alongside the previous 28-day credits.
Now I happened across the following idea, which seems interesting and leaves a few thoughts to ponder............
The Birk Economic Recovery Plan