Nov. 24 (Bloomberg) — The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by lawmakers, the Treasury Departmentâ€™s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.
When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.
â€œWhether itâ€™s lending or spending, itâ€™s tax dollars that are going out the window and we end up holding collateral we donâ€™t know anything about,â€ said Representative Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. â€œThe time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.â€
Well, you guys in Congress panicked and gave the Treasury Secretary sole power and discretion to hand out all this money, and now you think maybe he needs to be reined in? Um, maybe you should have thought of that before you made him unlimited God King of Bailouts.
If there was ever a good argument for a republican form of government instead of a direct democracy, this is it. Even with representative democracy, a divided legislature, checks and balances, and all that, our government collectively acted like a flock of startled sheep and rushed into huge legislation without considering the consequences. What kind of legal monstrosities would we have if we legislated by poll? (Oh, wait, I can guess: look at late Athenian democracy. Yeesh.)
It was some time between the creation of TARP and the actual disbursement of funds — surely Congress could have taken a week or two more and thought about it and considered all the ramifications and built in a few safeguards before passing the bill.
This is just like the PATRIOT Act passed just after 9/11. All those Democratic Congressmen and Senators who have been yelling about it for the past eight years: it passed 357-66 in the House, 98-1 in the Senate, so STFU, you voted for it. You voted for it in a panic; but that’s nobody’s fault but your own.
(Oh, and by the way, If I Were Dictator I’d pass a law against cute/clever acronyms for Acts of Congress.)
Back to the article: apparently, the Federal Reserve has been responsible for $4.4 trillion of the total. They aren’t being forthcoming either:
â€œSome have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,â€ Bernanke said Nov. 18 to the House Financial Services Committee. â€œWe think thatâ€™s counterproductive.â€
Gosh, thanks, Mr. Chairman. It’s nice to know that you don’t think we should know where you’re sending our money. No need for that. I’m sure that if your wife started writing large checks on your account you’d agree that knowing what she was spending it on would be counterproductive.
(Hat tip: Vodkapundit)