Bloomberg News has reported some incredible news.  The headline is “Fed Pledges Top $7.4 Trillion to Ease Frozen Credit”. 

That’s not a typo.  It’s $7.4 trillion in bailout cash, that according to Bloomberg, is $24,000 for every man, woman, and child in the United States.   Put in perspective, the article finds that this is the equivalent of half the value of everything produced in the U.S. last year—half the value of every house built, every car manufactured, every ad placed in the newspaper or served on the Web, every bag of groceries bought, every custom piece of glass cut by the local hardware store: half of everything. 

Your tax dollars at work.  And now we’re hearing about $325 billion in bailouts and loan guarantees for Citibank.

This is one more reason for legislation like that which I introduced last week to cut the $700 bailout in half.  (A bailout plan that I opposed from the start).  But this article also demonstrates the need for Congress to take a serious look at the financial activities of the Treasury Department, the Federal Reserve, and the FDIC.

Bloomberg has the context:

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, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.” 

And the rough breakdown of the $7.4 trillion, according to Bloomberg News:

“Bernanke’s Fed is responsible for $4.4 trillion of pledges, or 60 percent of the total commitment of $7.4 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago…

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 12 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Any way you slice it, this is taxpayer money.  Your money is being used to pick winners and losers and string along entities that made terrible business decisions.  It must stop.