Contingent Federal Liabilities

Yah, there's the SpendSpendSpendSpend porkulus and budget proposals.

And there's the imminent collapse of Social Security and Medicare.

And then there's "contingent liabilities," found by PowerLine.

The summer 2009 issue of the FDIC's Supervisory Insightscarries an article summarizing the government support for financial assets and liabilities announced in 2008 and soon thereafter...

The numbers are prefaced by an important note explaining that "the amounts are gross loans, asset and liability guarantee and asset purchases, do not represent net cost to taxpayers, do not reflect expected private capital expected to accompany some programs, and are announced maximum program limits so that actual support may well fall short of these levels." Nevertheless, they signify something.

According to table 1, the total gross support extended in 2008 was $6,788 billion (i.e., $6.78 trillion). That's a big number, but it has increased with stunning rapidity during the Obama administration. The "maximum capacity of support programs" announced or in place through the first quarter of 2009 was $13,903 billion (i.e., $13.93 trillion). The breakdown of the numbers provided comes with 22 footnotes that should be consulted for clarification
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For reference it may be helpful to compare these newly created government programs with the the gross domestic product of the United States. In 2008 the GDP of the United States was about $14 trillion. The recession will probably cause it to contract in 2009 to an amount that is exceeded by the total of the government support programs announced or in place through the first quarter of 2009.

Happy banks and brokerage firms.