Free Markets, Free People


$9.7 Trillion

That’s “trillion” with a capital “T“. And that’s the amount of money being spent by Congress to right our approximately $14.58 Trillion economy (source).

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7

Capitol Spending

Capitol Spending

trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

Again, that’s “trillion” with a “T”. In order to grasp the magnitude of that much spending, understand that you can reasonably round the number to $10 Trillion and thereby assume an extra $300 Billion, which is about the amount of TARP funds already pushed out the front doors of Congress. It’s also about one third of the amount being debated in Congress right now. In other words, the stimulus funds are pennies compared to amount of money already spent and/or promised.

Here’s another way to look at it (my emphasis):

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.

It’s a lot of money. So why is it that we’re only privy to the debate (if it can be called that) over a measly 10% of the spending?

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

Financial Rescue

The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid.

Many of us were disappointed with the spending habits of “compassionate conservativism” and lamented how it merely approximated socialist government policies with a friendly face. Of course, the alternative to Bush was real-deal socialist spending and a weakening of our national security.

Now we’re getting the full-on brunt of a dour-visaged collectivist government, employing a magician’s sleight of hand, and it makes the compassionate conservatism look positively stingy in comparison. While we argue over $800 Billion, another $9 Trillion is quietly being shoveled out the backdoor with little to no accountability.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return.

There’s no doubt that the Bush administration greased the skids, but Obama is running a rocket sled of spending, and there does not appear to be any end in sight.

One has to wonder when Atlas will finally shrug.

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37 Responses to $9.7 Trillion

  • And more is coming:
    - The States (California is bankrupt)
    - Pensions – especially government employee pensions
    - More for automakers and suppliers
    - More for banks

    We are sooooo screwed.

  • Straight out of hte democrat playbook

    http://www.politico.com/blogs/glennthrush/0209/Manley_sacks_Shuler.html?showall
    Reids spokesman
    “Maybe Someone should tell congressman Shuler that under the leadership of President Obama we have put together a bipartisan bill that will create or save 3 to 4 million jobs, and that We have been more than willing to work with our republican friends. We have accepted some of their ideas and will continue to do so.”
    Ah yes the call of Bipartisianship already. 3 “republicans” (RINOS) out of what 200?

    So when the bill fails republicans will get blamed because of the RINOS.

  • Here is a point I had not seen yet, from a comment over at theNextRight

    Just to put it in perspective: Bush and the Republican Congress, with their runaway spending ways, increased the federal budget from $1.90 trillion to $2.77 trillion over the course of 6 years, from 2001-2007.  That is an increase of $870 billion.  That included recovering from the worst terrorist attack in this nation’s history, creating an entire new department (Homeland Security), prosecuting two wars, Medicare Part D, No Child Left Behind, and various other pork-filled spending bills.
    Now, the Democrats want to spend about the same amount of money IN ONE MONTH.  And that’s not including the interest on the debt.

    An excellent comeback for the useful idiots trying to make this 1 bill the moral equivalent of 6 years of spending.  And this is only the start of President Obama’s “recovery plan.”

  • Again. Drum all 3 out of the caucus.

    If they have no credible primary challengers next time around, I’ll donate to their Democrat opponents.

  • I think I came up with a new nickname for Obama supporters who’ve been blinded by his light. 

    Useful mushrooms

    Asked to support his initiatives but left in the dark about what is in those initiatives.

    “We’re upset that we didn’t have this plan laid out to us prior to its signing. That we’re in the dark, we’re being left in the dark, kinda like mushrooms. Now, last minute it comes out to us after it’s passed, and we just have to reap what it sows, right?”

    • given what is usually put on mushrooms, the term useful $hitheads is a reasonable facsimile.  I know it does it for me. ;)

    • “Useful mushrooms”

      HA!  Now that’s just funny.

      • Updated definition:

        “Useful Mushroom” – Asked to support his initiatives, fed a lot of bullsh!t to make them grow, and left in the dark about what is in those initiatives.

  • 8:10 EST Obama just stated that Japan’s Lost Decade was a result of Government not moving fast enough or taking big enough steps.  This guy is incredible.

  • This has become the biggest clusterf**k in the history of mankind.  Let’s forget about distinctions between Republican and Democrat, the federal government is flailing around and its left hand doesn’t have any idea what its right hand is doing.  The amount of money that they have wasted already (TARP, Fannie/Freddie Bailout, Fed Reserve’s completely opaque doling out of 2 trillion dolars, etc.) is something we won’t fully recover from in my lifetime.  Add to that the expeditures referenced in this post and the unfunded entitlement liabilities and you have an armegeddon like disaster.  I am loathe to predict the future and perhaps people will come to their senses and limit the damage these politician clowns aredoing to our country and our lives, but I don’t see any help on the way.  There isn’t any other kind of human organization that would have tolerated complete and total incompetence of its leadership like we have in our federal and state governments.  The incompetence stretches across decades, across political parties, across presidential administrations, across all levels of government, across all branches of government (including all the bureaucracies).  We really may be finished.  I hope to God we aren’t but how does this chaos get controlled.  Our supposed “best and brightest” from all across the political spectrum are culpable in creating the mess or in allowing it to happen.    

  • The economy is in collapse.   Obviously what was being done before hasn’t worked.   The idea that “when will Atlas shrug” is absurd.  Atlas has fallen on his face and bleeding.  He needs help to get back up and right himself.  All I can say is I’m really glad I have a President who literally thinks like I do.  I have waited a long time for that.  And I’m really proud of my Maine Republican Senators.  Common sense reigns here in the north.  But over the last eight years we’ve seen the country literally go into deep decline (and some of you mocked me when I warned this was happening as much as two years ago).  It’s not all Bush’s fault, and not all the fault of the GOP.  But the old way of doing things is done.  Get used to it.

    • The idea that “when will Atlas shrug” is absurd. Atlas has fallen on his face and bleeding. He needs help to get back up and right himself.

      I’m not sure which is funnier. The fact that you don’t seem to understand what “Atlas Shrugged” means (other than the title of the book), or this follow up:

      All I can say is I’m really glad I have a President who literally thinks like I do. I have waited a long time for that.

      Erb, you are really out of your depth here.  I think it’s the hubris that’s weighing you down.

    • You get dumber every time you post. Quit while you are hopelessly behind.

  • The Socialist’s are going to bring to all the states what they brought to California. What will wages be when all wages are paid by tax dollars? BO will be known as the Father of Oppression.
    Prediction, the new market will be the black market.

  • So which of the following items in the following list are, in your northern educated opinion, absolutely necessary, common sense measures that justify this rush to judgment about this “stimulus” bill, and the quick passage being sought.  Far more money is going to be spent on Obama’s 3 pronged  “doing something, anything” plan for the economy, then has been spent on the Iraq war.  And the Iraq war had far more debate then this bill is getting.

    Yes, the old way of doing things is done.  Democrats are in power, and they aren’t going to listen to anyone.

    http://article.nationalreview.com/?q=YjcyODIyZGM2MGU1ZDdkNDgxZDc3OTNjYjM4ZDY1ODI

    $50 million for the National Endowment for the Arts
    $380 million in the Senate bill for the Women, Infants and Children program
    $300 million for grants to combat violence against women
    $2 billion for federal child-care block grants
    $6 billion for university building projects
    $15 billion for boosting Pell Grant college scholarships
    $4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24
    $1 billion for community-development block grants
    $4.2 billion for “neighborhood stabilization activities”
    $650 million for digital-TV coupons; $90 million to educate “vulnerable populations”
    $15 billion for business-loss carry-backs
    $145 billion for “Making Work Pay” tax credits
    $83 billion for the earned income credit
    $150 million for the Smithsonian
    $34 million to renovate the Department of Commerce headquarters
    $500 million for improvement projects for National Institutes of Health facilities
    $44 million for repairs to Department of Agriculture headquarters
    $350 million for Agriculture Department computers
    $88 million to help move the Public Health Service into a new building
    $448 million for constructing a new Homeland Security Department headquarters
    $600 million to convert the federal auto fleet to hybrids
    $450 million for NASA (carve-out for “climate-research missions”)
    $600 million for NOAA (carve-out for “climate modeling”)
    $1 billion for the Census Bureau
    $89 billion for Medicaid
    $30 billion for COBRA insurance extension
    $36 billion for expanded unemployment benefits
    $20 billion for food stamps
    $4.5 billion for U.S. Army Corps of Engineers
    $850 million for Amtrak
    $87 million for a polar icebreaking ship
    $1.7 billion for the National Park System
    $55 million for Historic Preservation Fund
    $7.6 billion for “rural community advancement programs”
    $150 million for agricultural-commodity purchases
    $150 million for “producers of livestock, honeybees, and farm-raised fish”
    $2 billion for renewable-energy research ($400 million for global-warming research)
    $2 billion for a “clean coal” power plant in Illinois
    $6.2 billion for the Weatherization Assistance Program
    $3.5 billion for energy-efficiency and conservation block grants
    $3.4 billion for the State Energy Program
    $200 million for state and local electric-transport projects
    $300 million for energy-efficient-appliance rebate programs
    $400 million for hybrid cars for state and local governments
    $1 billion for the manufacturing of advanced batteries
    $1.5 billion for green-technology loan guarantees
    $8 billion for innovative-technology loan-guarantee program
    $2.4 billion for carbon-capture demonstration projects
    $4.5 billion for electricity grid
    $79 billion for State Fiscal Stabilization Fund

  • All I can say is I’m really glad I have a President who literally thinks like I do.

    Most terrifying thing I’ve ever read.

    And I’m really proud of my Maine Republican Senators.  Common sense reigns here in the north(sic).

    Do tell.

  • Accursed site switch-ups!

    Fie … Fie … (?!)

    Oh well, I’ll plug in my mouse.  But I won’t like it.

  • Erb, I don’t even know how to respond to your nonsense.  What Obama and the Democrats are proposing is ten times more of EXACTLY (yeah, I used all caps) the same policies that got us in to this mess.  The fact that you feel good about Obama being president makes us all very happy for you.  However, he is taking us further down the toilet.  We have too much debt and he and the federal government are taking on $10 trillion more.  Interest rates have been too low for a decade and he is proposing a mandate that mortgage rates be lowered to 4 1/2%.  Our banks are still insolvent after the first $350 billion of TARP.  The real estate bubble is still being propped up.  The insolvency of our entitlement programs is still not being addressed.  There is more but everyone knows all of it.  There isn’t anything different about Obama’s policies.  They are ten times more of the same thing that got us in to this mess.  But at least Erb’s ego is less bruised. 

  • I’m buying gold.

    • Not a bad idea.
      Consider that gold was at around $300 when GWB took office, and was around $900 when he left.  So someone who bought gold predicting the end of the world when Bush took office would be sitting pretty right now.
      I also remember my father buying an AR-15 when Clinton took office for less than $200, and selling it for around $1000 toward the end of the Clinton administration.

      Gold and firearms.  Always a solid investment.

      Cheers.

  • This is the way the world ends.

    This is the way the world ends.

    This is the way the world ends.

    Not with a bang, but with a bailout.

    jt007We really may be finished.

    Yeah, I think so, too.  How can we possibly recover from the addition of this much public debt?  What happens when the United States goes bankrupt?  More importantly, how can we EVER trust our own government again?  As you point out, our political class (both parties) has been slowly building this disaster for years, adding a program here, and entitlement there, a few billion of debt one month, an unfunded mandate the next.

    And we all chipped in when we elected these clowns.  Most of the time, we thought we were choosing the lesser of two evils.  Well, enough “lesser” evils eventually add up to make some serious trouble, and the bill is coming due.

    We’re so screwed.

  • Erb before the election:

    Democrats are too much in favor of bureaucracy and government

    Erb after the election

    I have a President who literally thinks like I do

    Yet Erb whined like a weasel trapped in a cage when we all pointed out Erb’s true nature before the election. We’ve always known your ideals, Erb. That’s why some call you “Boris”.

  • BTW, anybody else see the report from CBO that the recession will end by the second half of this year whether the Porkulus passes or not? 

    CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009…

    In preparing its economic forecast, CBO assumes that current laws and policies governing federal spending and taxes do not change. This forecast, therefore, does not include the effects of a possible fiscal stimulus package.  On that basis, CBO anticipates that real GDP will drop by 2.2 percent in calendar year 2009, a steep decline.  CBO expects the economy to begin a slow recovery in the second half of 2009 and to grow by a modest 1.5 percent in 2010 (see Table 1).

    Sort of blows a hole in TAO’s dire predictions that PERMANENT recession awaits us if his wish list isn’t IMMEDIATELY passed.  When even al-AP picks up on such a whopper, you know TAO is really blowing smoke:

    Jennifer Loven, al-AP: Thank you, Mr. President. Earlier today in Indiana, you said something striking. You said that this nation could end up in a crisis without action that we would be unable to reverse. Can you talk about what you know or what you’re hearing that would lead you to say that our recession might be permanent, when others in our history have not? And do you think that you risk losing some credibility or even talking down the economy by using dire language like that?

    Can you say, “Politics of fear”?  I think you can…

  • I’m really proud of my Maine Republican Senators.  Common sense reigns here in the north.

    Erb is proud of his “common sense” Senators who voted for the “imperialist” war in Iraq. Who knew?

  • With the money supply increasing by over half total GDP can runaway inflation be far ahead?  It sure seems like a good time to spend down savings and max out the credit cards.  I’m just sayin’…don’t try this at home!

  • Out of my depth, Michael?  I’ve been predicting this for years.  A high current accounts deficit (it hit 6% of GDP by 2006), large budget deficits and private debt at record levels created a completely unsustainable economy.   I knew it was going to collapse, and that this is not just a recession, but in fact the start of a restructuring and rebalancing of the global economic system.  Note that ‘success stories’ of pro-market policies like Iceland and Ireland both now stand in or near bankruptcy.  This is a failure of the policies of the last quarter century.   I’ve seen this coming, a lot of you seemed to take the illusion of wealth from stock or property values seriously, and didn’t understand the economy of the last quarter century was built on a foundation of sand.  We responded to the 1980-82 recession with policies that were short term feel good, long term disaster (and both parties shared that).

    Jt07 – I agree that more debt is not a good thing, and I’ve been skeptical (publicly, in my own blog) of what I called a ‘trillion dollar gamble.’  But ultimately give the downward spiral we’re in, I think a stimulus package focused on investing for future production is probably better than doing nothing.  I’d prefer it be a long term restructuring with very limited short term stimulus, because the danger is that it will stimulate more consumption, simply putting off the inevitable pain of fundamental restructuring of the economy (like giving a heroin addict more heroin).    There also is a danger of inflation.  But right now we’re spiraling downward and ‘natural’ restructuring might take a decade or so.  In any event, the economy of the 90s and 00s is dead.  It was built on illusions, and they have shattered.

  • Here ya go, more spending for “rescuing” the nation out of bad debt.  And this is over and above the current “stimulus” bill.

    http://www.washingtonpost.com/wp-dyn/content/article/2009/02/09/AR2009020902212.html?hpid=topnews

    The gravity of the financial crisis confronting the Obama administration will come into stark focus today when officials unveil a three-pronged rescue program that may commit up to $1.5 trillion in public and private funds, and possibly more, lawmakers and other officials said.

    We are not in the “worst recession evah,” as a new post on here shows.  The % of job losses compared to previous recessions put this in middle of the pack.  So the rhetoric being thrown around in Washington is overblown.  Which should put the current Democrats plan into doubt.

  • I’ve been predicting this for years.

    He actually believes his own hype. It’s not just an act.

  • Look, gang, let’s put a frame around this.
    The amount of money being talked about is enough to pay off 90% of the mortagegs in the country.
    Since the problems started with mortgages by way of government, you’d think the real solution… paying off trouble mortagegs would be the cheaper and more effective alternative… of actually solving that issue was what they were about.
     

    • The only problem with your approach is that it does not provide adequate opportunities for the graft and corruption that “gets things done” in government.  Your suggestion would end up costing at least twice as much when you account for “greasing the skids”.

    • Exactly why they’ll never do it.

  • In all fairness to Prof. Erb he is right about the need to transform our country from a net over-consumer to a net producer.  However, assuming that PBHO is the leader to make it happen and that the Spendulus Pork Sausage is the way to achieve this is flawed.  However, per today’s news, <a href=”http://money.cnn.com/news/newsfeeds/articles/djf500/200902101259DOWJONESDJONLINE000621_FORTUNE5.htm”>a pretty big someone in the private sector gets the message and is acting on it</a>.

    This is how your vision will be achieved, Prof.  No government initiative has ever come close to what the army of individuals is capable of.

  • I’m convinced it’s about time for us to get into the stock market directly.  There’s some good deals to be had out there for long term investing.

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