SIGTARP REPORT: Taxpayer Support Of Wall St. = $3.7 Trillion, Daily Kos, July 21, 2010, by Bob Swern, used with permission, quoted verbatim:

The next time someone tries to sell you the Wall Street propaganda–you see it in diaries on the Rec List around here, from time to time, as well–that the banks are paying off their bailouts, and our deeply-captured (by the status quo) government is going to, somehow, miraculously make a profit on this ongoing historical fleecing of its citizens, show them this just-published chart from Special Inspector General Neil Barofsky’s office (from the SIGTARP report linked in the LA Times story, below): Incremental Financial System Support By Federal Agency Since 2007.

In fact, just 12 days ago, when it was noted by yours truly that another diary on the Rec List was reprinting a story that falsely claimed that taxpayers were going to make a profit from the Wall Street bailout, a lot of people here were quite dismayed by this inconvenient reality.

The truth is that, as of the end of June (according to the Special Inspector General’s Office), the bailout (ex-housing) has put taxpayers on the hook for over $2 trillion. If you include housing/mortgage industry supports, the number almost doubles to $3.7 trillion.And, if anyone thinks the support of the mortgage industry is providing massive benefits to homeowners, the reality is the primary beneficiaries of those related programs are the large mortgage underwriters, taking their vig these days, and then selling through their mortgages to…us–at last check, the government was the ultimate underwriter of 96.5% of all mortgages in this country. (In another diary posted the day prior to the one linked, above, I pointed out a Federal Reserve white paper that was published in 2004 which discussed the concept of the Fed providing mortgage underwriting services directly to consumers,  bypassing the traditional middlemen/banks, entirely, and saving U.S. homebuyers a significant chunk of cash, as a result of that new effort.)

Also, about that other Wall Street meme that the FDIC is supported by the banks, I would imagine that by sometime around 2030 or 2040, the banks may get around to digging themselves out of their FDIC hole; but, until then, taxpayers are holding those notes, too. (But, that’s just my opinion, right?)

Here’s the truth…and, as we all know, no matter how much some might try, ultimately, you cannot hide from that…

Report: Housing aid boosts total U.S. financial-system support to $3.7 trillion
Tom Petruno
LA Times
July 21, 2010      11:41 am – Despite the winding-down of most of the government’s aid programs for the financial system this year, total federal support for the system now is 23% greater than it was a year ago, the Treasury’s watchdog for bailout plans said in a report to Congress on Wednesday.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, said the government was on the hook for $3.7 trillion in support as of June 30, up from $3 trillion a year earlier.

Even as banks have been repaying the money the Treasury invested in them under one of the main TARP programs approved in 2008, U.S. aid to the housing market has ballooned, Barofsky’s report said. The increase has mainly come in the form of more capital for Fannie Mae and Freddie Mac and loan guarantees for various federal mortgage programs such as those of the Federal Housing Administration.

Barofsky “Notwithstanding [the] scaling back of TARP, an examination of the broader context demonstrates that the overall governmental efforts to stabilize the economy have not diminished,” the report said.

Thanks to Bob Swern for permission to republish his articles on an ongoing basis. You can see his blogroll at Daily Kos here. Email Bob Swern here.

See Bernanke Unleashes the Bears: No Fed Plans to Give More Support, Bernanke Says, The New York Times, July 21, 2010, by Sewell Chan:

WASHINGTON — The chairman of the Federal Reserve, in saying that it had no immediate plans to provide additional support to the economy, dashed the hopes of some economists and executives who have been pushing for action to add momentum to the sluggish recovery.

See The Wall St. Bill Doesn’t Protect Us From Banker Abuse: 5 Essential Reforms Are Still Needed, AlterNet, July 21m 2010, by Zach Carter.

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