Not sure whether to laugh or cry over this excellent piece by Jon Stewart and The Daily Show. The original Bloomberg article focuses on $13 billion in profit that banks accrued from $7.7 trillion in near zero rate loans from the Fed. The US government spends $40 billion a day, to put the $13 billion in context. The Fed claims the loans have been repaid and that they actually made money for the US government. Well, that may be so if you choose the ignore the inflationary effect of printing up $7.7 trillion. The money may have been “paid back”, but it’s still in the money supply. To put that inflation of the money supply into perspective, it’s about half of our annual GDP.
The Bloomberg article also highlights the fact that decision makers in Congress were kept in the dark. A Congress that had trouble passing a $700 billion TARP program surely would have been impacted by the news that the Fed was bailing out the banks with $7.7 TRILLION.
Enjoy…
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| America’s Next TARP Model | ||||
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