It’s almost impossible to comprehend: $7 trillion. Yet, reportedly that’s what it will take to fix the nation’s economic troubles. To put $7 trillion in perspective, consider this: The amount is “half the value of everything produced in the nation last year,” according to Bloomberg. To put it another way, it amounts to about $25,000 for every American citizen, and it’s more than double what was spent on World War II, after adjustments are made for inflation.
Regardless of how you spin it, $7 trillion is huge - and the figure is likely to climb much, much higher when all is said and done. So far, the government’s financial commitments to bail out the nation come to around $3 trillion. Of that amount, some of the big-ticket items include:
• $800 billion, which was committed in November to support consumer loan and mortgage-backed securities;
• $700 billion, approved in early October under the Troubled Asset Relief Program (TARP);
• $200 billion to prevent the bankruptcy of Fannie Mae and Freddie Mac;• $150 billion to stave off the demise of American International Group (AIG);
• $50 billion to guarantee money-market funds against losses;
• $45 billion to Citigroup; and$29 billion in the form of a loan to JPMorgan Chase for the purchase of Bear Stearns in March.
Keep this in mind: The $7 trillion figure still doesn’t account for the trillions of additional dollars held in “off balance sheet” assets by Wall Street firms. When those assets eventually come back on to their books, the final tally could make $7 trillion seem like peanuts by comparison.
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