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ALERT: Bailout Plan Projected to Cost $1.5 Trillion
The Treasury Department today will unveil its revised Troubled Asset Relief Program, to be renamed the Financial Stability Plan, and in advance of that we’ve pieced together a sketch of what the program will look like.
It looks like the plan could cost perhaps $1.5 trillion more than the $350 billion already spent on TARP. Here’s what will be spent:
-To “kick-starting” consumer and business lending: $800 million
-To expand the Term Asset-Backed Securities Lending Program (TALF): $100 million
-Mortgage foreclosure prevention: $50 billion
-Bank equity purchases: $200 billion
-Public/Private Investment Fund to buy “toxic” assets: $50 billion
Total: $1.2 trillion
We’re not sure what is the use of the other $300 billion.
The federal government is also going to institute new, mandatory “stress test” examinations for every bank with more than $100 billion of assets.
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