The Biggest Bail-out of Them All

The Wall Street Journal got this right in an editorial today:

“Meantime, the Fed’s near-zero interest rate policy will continue to disguise the real cost of government borrowing. One reason the Obama Administration can keep running trillion-dollar deficits is because it can borrow the money at bargain rates. Stanford economist and Journal contributor John Taylor says the Fed has bought more than 70% of new Treasury debt issuance this year.

All of this will create a fiscal cliff of its own when interest rates start to rise. The Congressional Budget Office says that every 100 basis-point increase in interest rates adds about $100 billion a year to government borrowing costs. Pity the President and Congress who have to refinance $15 trillion in debt at 6%. If Mr. Bernanke really wants to drive the President and Congress to reduce future spending, he shouldn’t keep bailing them out with easier money

The overarching illusion is that ever-easier monetary policy can return the U.S. economy to a durable expansion and broad-based prosperity. The bill for unbridled government spending stimulus is already coming due. Sooner or later the bill for open-ended monetary stimulus will arrive too.”

Click here for the full article.

LiberatedCit 5pts



Another big bail out for the banks on the way? The banks are facing a bunch of new lawsuits and Obama wants to get rid of DeMarco because he actually made them pay some. His making home affordable really only helped the banks with more taxpayer dollars since most of the people who got that still defaulted anyway now he is pushing for more.


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LiberatedCit 5pts

I don't know if that's the biggest bailout there was $75 Trillion the Fed dumped on the FDIC which is also taxpayer backed and the TAG (FDIC Insurance) program that  taxpayers also guaranteed for $1.5 Trillion of non interest bearing accounts. The extension of that was just voted down today not sure if it's totally dead though. The bank bailouts were trillions we even bailed out foreign banks but it's certainly a big bail out none the less. Thing is the politicians put the Fed in place and they could get rid of it but they won't because they love debt slaves and power. Just wait until the market forces interest rates to rise (big eyes)..


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Then again if they rise it would reward the responsible who did the right thing paid off their debt and saved another plus it would slow down govt. spending. We had low interest rates with Carter and the economy was a disaster.  In the early 80's after rates rose to 20% our economy improved.


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