Breakdown of U.S. Bailout - $8.5 Trillion

If you're wondering how big the U.S. bailout has gotten of U.S. financial institutions, you're not alone. Most media outlets could not explain it last week after the joint Treasury/Fed Reserve announcement that Citigroup would be next in line and would receive a massive $300 billion infusion from the U.S. govt.

Bloomberg news did the only analysis I've seen adding up the total already spent to $3.2 trillion of $8.5 trillion committed. How did the numbers get so big? Here's the analysis (click to enlarge):



As you can see, the much debated and approved Congressional legislation commonly known as "TARP" is only $700 billion of the $8.5 trillion available to either the Bush Administration or the Federal Reserve which is technically not accountable to either the President or Congress.

Are these numbers large? Yes, they are massive, amounting to 60% of the entire U.S. economy.

Keep this in mind next time you hear someone saying: we can't afford to bailout the auto makers and save American jobs.

Resuming "The New Economy" Blog

After a hiatus, I'm resuming this blog I created several years ago. The time seems right to bring new ideas to the fore and participate in the discourse for how to address the challenges facing American workers.

Pension Meltdown Continues - Verizon Joins In

This week we heard (once again) that misery loves company.

First the airlines (United, Delta) defaulted on their pension obligations to their employees, then the auto suppliers (Delphi) joined in. Now the telelphone companies are getting into the act.

Verizon announced 2 things this week: 1) it will not allow managers to build additional pension benefits and 2) it will contribute less to the health care benefits of managers when they retire. While the first will require employees to reconfigure how they save for retirement (easier if you're 35 rather than 55), the second is the real blow that will suck up a good chunk of retirement funds. (Read more.)

The Verizon deal is notable because unlike the airline and auto suppliers, the company is not in bankruptsy. In fact, Verizon 's self-assessment of Q3'05 results was that they had "a very strong quarter" which was very profitable. (Read more.)

The way has successfully been shown for all companies - pensions are new found money for corporate chiefs.

What does this mean for you? 1) If you can, take your pension with you when you leave the company. 2) Consider buying long-term health insurance if you don't have anyone to take care of you and are worried about your health. 3) Consider buying income annuities on the installment plan (read more).