"Bailout" won't stop the ship from sinking

Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago. The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department's $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis. When Congress approved the Treasury Department's $700 billion Troubled Asset Relief Program (TARP) on Oct. 3, the need for transparency was acknowledged.Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in, as well they should. Better late than never but limitations need to be placedon the Fed so that authority returns to elected officials as opposed to appointed ones. Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government's rescue effort. The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14. Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.There's no transparency to it so who's to say they're right in doing this.The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world's companies and brought down three of the biggest Wall Street firms.Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy. Most of the spending programs are run out of the New York Fed, whose president,Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

The money that's been pledged is equivalent to $24,000 for every man, woman and child in the country. It's nine times what the U.S. has spent so far on wars in Iraq and Afghanistan. It could pay off more than half the country's mortgages.There's a lot of supposedly smart people who look to be totally incompetent and it's all going to fall on the taxpayer."

President Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government's current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.

And still they play and manipulate and have no cognisance of the fact that all the problems in the first place were produced by the behind the scene manipulators playing a game of chess with the worlds population as the pawns. It looks like this game will not end untill the whole American economy completely colapses and the human spirit rises to the rescue when there is a realisation that pieces of paper with little pictures on them can not save or help anyone or anything.