How much did the Feds actually spend to stop the economy from going completely into the Black Hole of oblivion? 3.3 Trillion? 9 Trillion? More?
Fed Disclosure Sheds Light on Scope, Risk of $3 Trillion Safety Net
Fed Doled Out 9 Trillion
Senator Bernie Sanders would not take no for an answer on March 3, 2009 when Federal Reserve Chairman Ben Bernanke refused to disclose to the Senate Budget Committee who precisely the Federal Reserve bailed out behind the scenes towards the end of the Bush administration and how much they really received.
Fed Stonewalling – Bernanke Flatly Refuse to Say Which Banks Took Trillions in Taxpayer Loans
Senator Sanders thought the American taxpayers who footed the Wall Street and corporate Bailout and risked everything should know who the Federal Reserve was bailing out behind closed doors. He immediately crafted a bipartisan amendment that was added to the Wall Street Reform and Consumer Protection Act that forced the Federal Reserve Board to shine sunlight on their activities and let the American people know exactly what they did to keep certain financial and corporate institutions solvent during the dark economic times towards the end of the Bush administration.
Mind-Blowing Fed Secrecy: Sanders Offers Amendment to Wall Street Financial Reform Bill
On Friday, December 10, 2010, which is also the anniversary of the day the Universal Declaration of Human Rights was proclaimed in 1948 by the General UN Assembly, Senator Sanders gave an economics lesson to the American people about how Democrats and Republicans could vastly improve tax legislation initially proposed by the GOP leadership and President Obama. Senator Sanders ideas would really achieve the goal of creating needed jobs for Americans and helping to further kick-start the economy.
In his educational filibuster-style speech Senator Sanders revealed the details about who the Federal Reserve bailed out and how much they received. This information became available in a data dump on December 1, 2010 on the Federal Reserve website as required by the Wall Street Reform bill Senator Sanders helped pass through Congress.
Here is an excerpt from an article that appeared on Huffington Post by Senator Bernie Sanders on December 2, 2010, “A Real Jaw-Dropper at the Federal Reserve” that reveals the eye-popping unbelievable amounts loaned to major financial institutions and corporations by the Federal Reserve. In many cases these same institutions were responsible for getting us into the deep economic ditch that the American economy and world economy sunk into in 2007-2009. Effects of the greedy irresponsible activities of Wall Street are still causing repercussions today. Do they really care?
Who Benefited from the Multi-Trillion Wall Street Bailout by the Federal Reserve?
The amounts loaned to these institutions by the Federal Reserve at near 0% interest rates defy imagination because the cumulative transactions to Citigroup, Bank of America, Wells Fargo and Merrill Lynch exceed the amount of money spent on the annual U.S. Budget! The dollar figure of “$3.3 trillion in emergency loans that until now were totally kept from public scrutiny” reveal the true cost of the Wild West consequences of Wall Street’s self-serving activities, before, during and after the economic escapades that resulted in millions of jobs being lost that also left the U.S. economy in the literal toilet.
From Bernie Sander’s article on Huffington Post:
After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses.
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.
When I told a colleague the amounts quoted by Senator Sanders, he thought perhaps there was a typo or a misprint. However, the numbers are accurate even though you will see they are in the absolute stratosphere.
Excerpts from Senator Sanders speech on December 10, 2010 on the floor of the Senate:
As it turns out, while small business owners in the State of Vermont and throughout this country were being turned down for loans, not only did large financial institutions–and I am talking about every major financial institution–receive substantial help from the Fed, but also some of the largest corporations in this country–not financial institutions–also received help in terms of very low interest loans.
So you have every major financial institution, you have some of our largest private corporations, but here is something we also learned, and that is that this bailout impacted not just American banks and corporations but also foreign banks and foreign corporations as well, to the tune of many billions of dollars.
Then, on top of that, a number of the wealthiest individuals in this country also received a major bailout from the Fed. The “emergency response,” which is what the Fed described their action as during the Wall Street collapse, appears to any objective observer to have been the clearest case that I can imagine of socialism for the very rich and rugged free market capitalism for everybody else.
In other words, if you are a huge financial institution, whose recklessness and greed caused this great recession, no problem. You are going to receive a substantial amount of help from the taxpayers of this country. If you are a major American corporation, such as General Electric or McDonald’s or Caterpillar or Harley-Davidson or Verizon, no problem. You are going to receive a major handout from the U.S. Government.
But if you are a small business in Vermont or California or Virginia, well, guess what, you are on your own because right now we know one of the real impediments to the kind of job creation we need in this country is that small businesses are not getting the loans they need.
Furthermore, what we now know is the extent of the bailout for the large financial corporations. Goldman Sachs received nearly $600 billion. Morgan Stanley received nearly $2 trillion. Citigroup received $1.8 trillion. Bear Stearns received nearly $1 trillion. And Merrill Lynch received some $1.5 trillion in short-term loans from the Fed.
Questions of the Day:
Should Congress require the Federal Reserve Board to disclose all secret deals with banks and corporations? Why or why not?
Was the Federal Reserve Board special multi-trillion dollar loans and other arrangements for financial institutions and corporations similar to “socialism for the very rich and rugged free market capitalism for everybody else?” as Senator Bernie Sanders said on the floor of the Senate?