The $16 trillion bailout

From Socialist Worker:

Petrino DiLeo explains how Wall Street banks are still raking in taxpayer dollars.

September 7, 2011

WHILE THE media focused on the Washington charade over raising the federal debt ceiling and cutting the estimated budget deficit, a a one-time audit of the Federal Reserve released in late July showed that the Treasury Department and Federal Reserve Bank have doled out an incredible $16 trillion in assistance to financial institutions and corporations in the U.S. and around the world.

The audit, conducted by the U.S. Government Accountability Office (GAO), was mandated as part of the Wall Street Reform and Consumer Protection Act sponsored by Democratic lawmakers Christopher Dodd and Barney Frank.

The audit revealed that the various emergency lending facilities, guarantee programs and bailouts for Wall Street–a project wholeheartedly supported by both major parties–was in itself far larger than the deficit that now has the same parties gunning for deep cuts to critical social programs.

A table–buried on page 131 of the audit–shows the staggering figures. Of the $16.1 trillion in bailout money overall, most went to a handful of U.S. and international financial institutions. Through the various mechanisms, Citigroup borrowed $2.5 trillion, Morgan Stanley took $2 trillion, Merrill Lynch received $1.9 trillion, and Bank of America got $1.3 trillion. With a total of $8.8 trillion among them, the four banks account for more than half of the total bailout.

Other recipients that received loans worth $500 billion or more included the British banks Barclays and the Royal Bank of Scotland Group, as well as Wall Street colossus Goldman Sachs and the defunct investment bank Bear Stearns.

The Bloomberg news service made a big deal of the results of its own audit, which showed that Wall Street banks received $1.2 trillion in secret loans. That number has been widely reported, and a number of politicians postured over the findings.

But the $16.1 trillion bailout money trail turned up by the GAO audit has been met with silence.

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