Scarborough still distorting $23 trillion bailout figure
MSNBC host Joe Scarborough falsely claimed that "Congress says that we've gone through -- guaranteed $23 trillion to banks and institutions." In fact, the source of the $23 trillion figure, a report by the inspector general of the Troubled Asset Relief Plan, clearly states that the number represents the federal government's hypothetical maximum amount of support to the financial system, not the amount of support that has been committed, which is significantly less.
Scarborough falsely claimed we've "guaranteed $23 trillion to banks and institutions" in the past year
From the September 2 edition of MSNBC's Morning Joe:
SCARBOROUGH: You do see the independents breaking away -- and you're right, it could be about Afghanistan as well as runaway spending. But over the past year, first with George W. Bush and Hank Paulson, now with [Tim] Geithner and Barack Obama, Congress says that we've gone through -- guaranteed $23 trillion to banks and institutions. I mean, it's out of control. Now maybe that gets paid back -- that's the big debate. But $23 trillion, it's staggering.
$23 trillion figure is not an estimate of funds spent or guaranteed
$23 trillion figure represents maximum "potential Federal Government support." The source of the figure, a report by Neil Barofsky, special inspector general for the Troubled Asset Relief Plan (SIGTARP), stated that the "potential Federal Government support" to the financial system is "estimated to be as large as $23.7 trillion." In the report, SIGTARP said that the potential support figure represents the "maximum amount of support" the federal government specified it "could provide" under the programs created to aid the financial system "since the onset of the financial crisis in 2007," not the amount of support it has provided.
$23 trillion figure includes programs that have been "canceled" or "not utilized." The SIGTARP report stated that the $23.7 trillion figure includes programs that "have been canceled or repaid" or "not utilized," and that "the actual potential for losses is likely to be lower." The report further stated that the $23.7 trillion figure "quantifies the gross, not net, exposure that an agency would face should all eligible program applicants request assistance at once to the maximum permitted under the program guidelines."
Current balance of federal support is around 1/8 of total potential support. The report specifically concluded that this estimate "do[es] not represent a current total" and was not intended to "provide an estimate of likely net costs to the taxpayer." In SIGTARP's quarterly report, Barofsky made clear the total potential support figures "do not represent a current total, but the sum total of all support programs announced since the onset of the financial crisis in 2007" (emphasis added). The report states that the current balance of outstanding support is $3 trillion and that this amount "may include overlapping agency liabilities, 'implied' guarantees, and unfunded initiatives":
NY Times' Norris: $23 trillion figure is "sheer unreality." In a July 21 article, New York Times reporter Floyd Norris wrote that the $23 trillion figure is a "sheer unreality" and reported that "in the report accompanying his testimony, Mr. Barofsky conceded the number was vastly overblown." Norris said the number includes "estimates of the maximum cost of programs that have already been canceled or that never got under way." Norris also reported of the $23 trillion figure:
It also assumes that every home mortgage backed by Fannie Mae or Freddie Mac goes into default, and all the homes turn out to be worthless. It assumes that every bank in America fails, with not a single asset worth even a penny. And it assumes that all of the assets held by money market mutual funds, including Treasury bills, turn out to be worthless.
It would also require the Treasury itself to default on securities purchased by the Federal Reserve system.
The sheer unreality of the number did not stop some members of Congress from taking the estimate seriously.
Norris also reported that in an interview, Barofsky said:
"We're not suggesting that we're are looking at a potential loss to the government of $23 trillion," he said. "Our goal is to bring transparency, to put things in context."
Asked what he thought the maximum total cost could be, he replied that it was not his job to estimate that, and declined to give a figure.
Scarborough has repeatedly misled on $23 trillion figure
Scarborough "read" that "bailouts are now coming in at a price tag of around $23 trillion." On July 22, Scarborough falsely asserted that the $23 trillion figure represents the cost of "bailouts," asserting that he "read yesterday somewhere that the bailouts are now coming in at a price tag of around $23 trillion." During the program, Washington Post columnist Steven Pearlstein said the $23 trillion figure is "a meaningless nonsense number," an assertion Scarborough mocked.
Scarborough continued to advance falsehood, claiming $23 trillion "was Congress' estimate." On July 23, Scarborough stated that he "went and checked that $23 trillion number" because he "was wondering what hyper-charged, right-wing birther site came up with that number," and that he "found out last night, looking back at the number, the $23 trillion, that was Congress' estimate." In fact, the figure came from the SIGTARP report and does not represent that "price tag" of the bailouts, as Scarborough had previously claimed.
Idiots like Scarborough will undoubtedly misuse it and not understand the proper meaning & context.
The $23T figure was a hypothetical figures of risk exposure from the rescue packages. NOT the total amount being spent.
News models like these should stick to crappy he said/she said politics. Economics is far too dangerous for them ...
There's one teeny tiny problem with this math: Medicare, like Social Security, has ALWAYS been funded to operate at the edge of a cliff. Meaning we fund it to meet the needs of today, not tomorrow. But, of course, we never reach the cliff. It keeps moving forward. We call that the passage of TIME.
That's why the doomsday for SS keeps marching forward, same for Medicare. Conservatives have been sounding the death knell for both for decades. Yet it hasn't happened, and it won't happen, unless everyone stops working and collecting a pay check.
Randy
Jim P had this to say on Daily Kos "The Mass Media's purpose is to undermine the people's ability to have a meaningful say in their own governance. Everything else, money, viewers, etc, everything else, is secondary to what the Corporate Mass-Reach Media is about." I'm in agreement with him on this.