"America's economy is facing unprecedented challenges. We're responding with unprecedented measures," President Bush declared in a press conference Friday.
Bush, of course, was speaking of the government's coordinated efforts to tackle a financial crisis that has roiled global markets and brought down venerable financial institutions.
"These measures will require us to put a significant amount of taxpayer dollars on the line," the President added.
Ah, yes. There is no free lunch. Just how significant an amount of taxpayer dollars remains unknown, but it's going to be massive.
Estimates of the proposal to let the government buy bad assets from banks range from $500 billion to $1 trillion -- and that's in addition to costs already incurred for various government actions this year, including, but not limited to:
$29 billion to fund JPMorgan's takeover of Bear Stearns
Up to $200 billion each for nationalization of Fannie Mae/Freddie Mac
Up to $85 billion for AIG
$50 billion to insure money market funds
Approximately $300 billion of Fed liquidity measures this week alone.
"It's impossible to put any reasonable estimate on what it's going to cost us as taxpayers," says Tom Brown of Bankstocks.com and Second Curve Capital. "We know it's going to cost an awful lot [and] the more they borrow the more interest rates go up and the more taxes we'll have to pay."
As discussed in the accompanying video, it's no coincidence all this is happening in an election year. But are either John McCain or Barack Obama really prepared to handle the mess one of them is going to inherit?
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