@Stephen: My answer to your question is that it is extremely difficult to say how much has been spent already, or which of the many programs will max out its allotted funding. Here is an excerpt from a December 13th Wall Street Journal article concerning this very topic.
U.S. News: The Key Numbers Behind the Bailouts
Jon Hilsenrath. Wall Street Journal. (Eastern edition). New York, N.Y.: Dec 13, 2008. pg. A.3
(c) 2008 Dow Jones & Company, Inc.
[...]Using the most expansive counting possible, the U.S. has pledged to spend, invest or loan as much as $10 trillion to backstop or bailout banks, money-market funds, depositors and many others. Yet the final tab is likely to be much, much smaller.
Consider the Federal Reserve's pledge to backstop a $1.3 trillion piece of the commercial-paper market by buying this short-term corporate debt itself. So far it has invested $312 billion in the program; Fed officials expect to get all that back with interest. It is only taking the paper of high-rated companies and has different forms of security. Do you count the $1.3 trillion market it has pledged to backstop, the $312 billion it has thus far invested, or nothing at all because it expects to get its money back? Defining the parameters of a count is also tricky. Do you count the $168 billion fiscal stimulus package that had come and gone before the September blowup in financial markets?
[...]
FEDERAL RESERVE: Since early August 2007, the Fed's balance sheet has grown from $851 billion to $2.245 trillion as it has created rescue programs such as the commercial-paper facility. [...] In all, the central bank has already committed about $1.9 trillion to support financial markets through programs including commercial-paper lending, rescues of Bear Stearns and American International Group Inc., lending to banks, as well as other steps. [...] Though the Fed has written down $2 billion on loans to Bear Stearns, Fed officials consider its programs to be well-secured. It is also earning interest and fees.
[...]
TREASURY: The Treasury has so far committed $335 billion of its Troubled Asset Relief Program for a variety of efforts -- pumping capital into banks, bailing out AIG and Citigroup Inc. and developing a program with the Fed to support consumer lending. Separately, it has invested $14 billion in Freddie Mac, the mortgage-finance firm that was effectively nationalized by the government in September, and purchased $49 billion in mortgage-backed securities to support Freddie and Fannie Mae, the other mortgage firm under government stewardship. All together, that's $398 billion invested by the Treasury so far.[...]
HUD: [...]The [$300 billion] program, called Hope for Homeowners, [...] launched in October and so far it has used very little of the money.
BROADER PLEDGES: Adding together rescue money already explicitly committed by the Treasury and Fed brings the dollars spent, loaned or invested to date to $2.3 trillion, a number that is sure to grow and doesn't count fiscal stimulus.
The numbers get much larger when one considers the size of some markets the government has pledged to support. The Treasury has a program to backstop $3 trillion worth of money-market mutual funds. (It hasn't had to tap any funds so far to honor that commitment and has reaped about $800 million in fees on it.)[...]
As far as the Treasury, most things they've done so far, including the recent "Big Three" bailout, has come from the first half of the giant bailout from October---$375 billion. Other agencies are spending money, but not in such broad swathes. Also, even money that has been appropriated hasn't necessarily been spent, for instance the $25B that was going to be loaned to automakers for making greener cars, or the $300B for refinancing mortgages over the next few years. Also, not everything you hear is new spending: the FDIC has its own assets that haven't run out yet to my knowledge, so general tax revenue hasn't been used.
It is very difficult to understand all the things the Federal Reserve is doing (I sure don't). Here are some links concerning the Fed's actions, especially its balance sheet expansion (Source:
The Economist,
Federal Reserve Statistical Release):
"Plan B" 2008-10-04,
"Ground Zero" 2008-12-18,
Current balance sheet data@Everyone interested: The rest of this post will be about the link from Jeff, which I feel the strong need to rebut. If you don't want to read a long post, just understand that the linked article is exaggerated and distorted; you have to dig deeper to understand exactly how it is wrong.
According to this article I found, which cites Bloomberg, the sum of bailouts promised by the Federal government in 2008 is approximately $8.7 trillion. Apparently, this exceeds the combined costs of all major U.S. wars adjusted for inflation.
There are a number of problems with the
linked article and
its source, though the source data does provide a useful catalog of bailout programs. Please keep in mind that I do not endorse all of these government actions, but I do want to add clarification for anyone interested in how this is unfolding. (Disclosure: I am a GE shareholder.)
First, the comparison of these two numbers is somewhere between apples-to-oranges and apples-to-giraffes. There are at least three levels of distortion: (1) The sensationalized $8.5 trillion number is the maximum amount that all of these programs and guarantees could cost if they all spent the all of the money. That's very different from the amount currently spent. (2) Even the amount actually spent is primarily in the form of loans; the government will actually receive much of it back, particularly... (3) The Federal Reserve section---which is the majority of both the maximum number and the spent-so-far number. The Fed's money doesn't come from taxes and does not add to the national debt or annual deficit; they can literally make it up out of thin air, though they risk inflation by doing so.
The source cited by the article (which is not Bloomberg, but a site which cites Bloomberg without linking) makes a better distinction between the "maximum commitment" and the amount "tapped so far" under a variety of programs. Even here, though, there are some problems, mostly with the distinction between the government guaranteeing a debt and actually spending money. There are several major line-items indicating they have been entirely spent which haven't been:
(1)
Treasury Exchange Stabilization Fund as $50 billion in spent bailout money, even though the program has existed since the 1930s and has
estimated 2008 spending authority of $1.4 billion. The $50 billion number is the
ESF's total assets, which are apparently being used to
guarantee money market funds---only one of which busted, before this guarantee was instituted, so the $50B haven't been spent (see WSJ quote above).
(2) "Citigroup bailout" under the Federal Reserve ($291B) and FDIC ($10B) sections: As explained in
The Economist, the bailout "fenced off" $306 billion of toxic assets owned by Citi, on which Citi will absorb the first $29B in losses, with further losses falling to the Fed & FDIC. This money has not been spent yet.
(3) "HOPE for Homeowners" under the Federal Housing Administration shows that all $300B have been spent---false; the program
offers refinanced mortgages from 10/01/2008 to 09/30/2011, meaning most of the money is still unspent (see WSJ quote above).
(4) FDIC "Guarantee to GE Capital": Not only has no FDIC money been spent on guaranteeing GE debt (since it hasn't defaulted), but
the $139B number is 125% of the eligible, current debt quantity.
It also counts two more dubious additions: $29 billion in "tax breaks for banks", which I am skeptical of without a more detailed breakdown of whether these are new tax laws, or simply a reduction in their expected tax bill (which is natural, since few have any profits to tax). Also, $168 billion from the stimulus sent to taxpayers in the spring of 2008. This is certainly recession-related spending, but it might not be considered part of the bailout avalanche. You may also note that the arithmetic is wrong for the totals in both columns of the Treasury section, by $153B and $25B, respectively.
Moral of the story: Numbers are dangerous; handle with care!
