Monday, February 09, 2009
It looks like Bloomberg v. Board of Governors of the Federal Reserve System is moving along nicely with arguments to be heard as soon as this month.
Recall that Bloomberg sued the central bank after their Freedom of Information Act request about Fed lending to distressed banks was denied. They simply wanted to know what kind of assets they were getting in exchange for their pristine Treasuries, how much and from whom.
The Fed wouldn't tell 'em. The Treasury Department isn't talking either.
In the meantime, the staff at Bloomberg is taking an increasingly skeptical look at both the sums of money involved and how it is being authorized and spent, as seen in this report:
The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.You have to wonder why Congress even bothers going through the arduous task of passing legislation for a measly trillion or two when so much money can be made available without the approval of elected officials - about four times as much by my math.
Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed.
“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?”
And the best part about doing it that way is that you don't have to tell anybody where it went.
Of course, Congress might want to know and you might get sued.
The Bloomber report goes on to put the total amount of money in perspective just like when Senate Republicans were talking about the stimulus package the other day with images of hundred dollar bills stacked 600+ miles high and/or laid end to end, circling the earth 40 times.
That was for just $800 billion.
Somehow, for $10 trillion, this doesn't sound nearly as impressive.
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.Maybe it is impressive, but $1,430 doesn't really sound like a lot of money.
Remember when they talked about $30 or $50 billion for Iraq and then it turned into hundreds of billions of dollars and that was such a big deal?
Now, even a hundred billion dollars doesn't sound like much anymore.
Soon, one trillion might not sound like a lot either.