How much has been spent by the U.S. government and the Federal Reserve Bank trying to re-inflate the very bubble that caused our current economic woes in the first place?
The Federal Reserve is now buying $85 billion per month of bonds to keep mid to long-term interest rates (the kind you buy a house with) at la-la land levels. It is predicted that by the end of this year, the Fed will have around $4 trillion in such bonds on its balance sheet, many of them potentially worth far less than were paid for them when they try to unload them in the future. Care to guess who will be the buyer of last resort?
The Obama administration has run trillion-dollar plus deficits every year since he took office in 2009, much of it in an effort to stimulate a moribund economy and help homeowners keep houses they really couldn’t afford in the first place. At the same time, homeowners are actually being discouraged from paying their mortgages lest they miss out on some of the mortgage candy Mr. Obama is handing out. Is this how you run an economy?
All calculated, the amount spent trying to sustain the unsustainable is something in the $5-8 trillion range. With that much money, they could have paid off every mortgage in the country. Where did the money go? Meanwhile, bubbles are inflating again in stocks, on-going in bonds, and still exist in a number of commodities.
Get ready for bailouts 2.0. That will be when our whole country needs a bailout.
Michael H. Bond
Monroe
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