the LYNCH report

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Posts Tagged ‘global credit crisis

$1 Million/Day for 2,295 Years: Senate Bailout Plan…

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money-stacksThe US Senate is set to pass a so-called “bailout bill” that amounts to $838 billion. To give that some sort of perspective, you’d have to spend a million dollars a day for two thousand, two hundred and ninety-five years to spend an equivalent amount. Of course, that doesn’t include the interest which will accrue on that staggering debt.

How will this gigantic tab be paid? It’ll by paid by the US taxpayer: $6,2,36 per taxpayer, to be precise. That, of course, is on top of the $13,500 each taxpayer is already on the hook for via the original TARP money, the bailout of AIG, Lehman, et al. New total: $19,736 for each and every taxpayer, on average, plus interest.

There’s an additional downside: money invested in the government bonds to subsidize this massive spending is, of course, money which will not be otherwise invested in the economy for such things as actually spurring economic growth: for every dollar invested in a government bond, there’s one less dollar available for private companies looking to grow and expand.

The total amount borrowed for “bailout” spending to date? $2,651,797,108,408.

Crisis? What Crisis?

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Every day, at least since early September, we’ve heard a barrage of commentators, “experts”, talking heads and pundits expound on the “credit crisis”. Credit has dried up, we’re told. Companies cannot get financing. Banks refuse to lend to each other. The rhetoric has been used as justification for everything from the “bailout” packages (at a cost of $7,546 per taxpayer, and counting…) to the nationalization of insurance companies and, coming soon, automobile manufacturers.

But has credit actually dried up? What does the hard data tell us?

Well, according to data produced by the US Federal Reserve, lending activity does not appear to be slowing down. In fact, quite the contrary: commercial and industrial loans are up. So are consumer loans. We’re told banks are terrified of lending to one another for fear the borrower will collapse before the loan is repaid, however interbank lending shows no ill-effects of the so-called “crisis”.

Of course, such statistics aren’t cited by the vested interests currently in Washington, arms outstretched.

Consumer loans, Oct 24, 2007 - Oct 22, 2008

Consumer loans, Oct 24, 2007 - Oct 22, 2008

Commercial and industrial loans, Oct. 24, 2007 - Oct. 22, 2008

Commercial and industrial loans, Oct. 24, 2007 - Oct. 22, 2008

Interbank loans, Oct. 24, 2007 - Oct. 22, 2008

Interbank loans, Oct. 24, 2007 - Oct. 22, 2008