Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion

This is horrendous:

Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion

March 31 (Bloomberg) — The U.S. government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.

That is, debt equal to 90% of GDP, an exorbitant and unprecedented amount in all our history.

Daily Finance asks,

But here’s the big unanswered question: Why is it necessary to put so much taxpayer money at risk? Beyond apocalyptic arguments that remind me of the Iraq mushroom cloud from its non-existent WMDs, I have not heard a convincing reason why this money needed to be spent.

But the reality is that the money is now out there so I think it’s time that Americans got an accounting of exactly how that money has been spent and how much of a return us taxpayers have gotten from that investment.

Corrente‘s nowhere near as sanguine.

Take a look at what $12.8 trillion looks like, and then

remember that $1 trillion is about what the US collects in taxes in a year. So to pay for this recovery, the government would have to raise our taxes nearly 13x. Either that or pass it onto future generations.

All part of the punch-drunk plan.

And no, those numbers do no include universal health care.