Various other government agencies and private companies taken over by the government also have obligations of nearly another $5 trillion. Weve already booked complete losses on $140 billion worth of these obligations. Yet they remain completely off the federal balance sheet. When you add these other, genuine, federal obligations that exist right now, today, you come up with a total debt figure thats much more than $20 trillion. Far more than half of these debts were assumed under President Obama. We dont know what the full burden of these new and existing debts will be in total, over time. Thats because the Federal Reserves power to manipulate interest rates is unlimited—at least for now thats the case. We dont know how much of Fannies and Freddies bad debts will eventually be covered by the U.S. Treasury. (We do know they have an unlimited line of credit... so its a safe bet that we havent seen the last of these charges.) Finally, we have no idea what the eventual costs of the Federal Reserves ongoing expansion of the monetary base will be over the long term.
Posted on: Sat, 30 Aug 2014 12:04:06 +0000
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