The $4,284,500,000,000.00 bailout

It is common to hear about the bailout costs and the $700 billion number associated with the exercise. However, there are many elements of the taxpayer sponsored bailout quietly gobbling huge sums of money behind the scenes. Fortunately, I managed to stumble upon a website that is keeping a running tab on the total bailout allocations. CNBC estimates that the total amount allocated so far in this taxpayer financed orgy to be $4,284,500,000,000.00. Yes, that is right - we are putting over 4 trillion dollars into this.

Here is a graphical breakdown.

I see very little money allocated to the tasks involved in the government working with homeowners in helping them change their lending terms or mortgage conditions. Helping hurting homeowners (albeit a difficult and arduous task) will help us identify the quantum of wrongful mortgages, their hidden clauses and their knock on effects on the bundled securities that they back up. Of course, such an effort will involve not just the government, but a concerted attempt by the mortgage industry and banks in sitting down at the table with the aggrieved mortgage holders and working this thing though – but then that is hard work and it benefits only the common folks.

Instead, Sec. Paulson writing in an op-ed piece here tells us that the best way to address housing and mortgages which are at the root of our economic difficulties is "more access to lower-cost mortgage lending to slow the decline in the housing market and reduce the number of foreclosures".

What he is telling us is that as soon as lenders (i.e. institutions like banks and mortgage lenders) are bailed out, the economic situation should stabilize. Again he is brandishing the principles behind the failed, trickle down Reaganomics that have led to naught over the last eight years… His idea seems overtly flawed because the solution completely bypasses the segment that is hurting (homeowners) and rewards the segment that caused the hurt in the first place (banks/mortgage lenders who with obfuscated terms and conditions bilked fledging homeowners)... I see a long hard slog ahead…