EconomicCrisis.US

So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.

Just to be clear: the economic situation remains terrible, indeed worse than almost anyone thought possible not long ago. The nation has lost 6.7 million jobs since the recession began. Once you take into account the need to find employment for a growing working-age population, we’re probably around nine million jobs short of where we should be.

And the job market still hasn’t turned around — that slight dip in the measured unemployment rate last month was probably a statistical fluke. We haven’t yet reached the point at which things are actually improving; for now, all we have to celebrate are indications that things are getting worse more slowly.
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The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday.

Under the worst of circumstances, the report said, the government’s maximum exposure could total nearly $24 trillion, or $80,000 for every American.

The figures are part of a tough new quarterly report to Congress from special inspector general Neil Barofsky, who accuses the Treasury Department of repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent.
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Executives at Goldman Sachs were told last week that they could expect to receive their highest ever bonuses this year, according to an article published Sunday in London’s Observer newspaper. The first half of this year has seen a spectacular rebound for Goldman, and the company’s London staff were told they would receive corresponding end-of-year bonuses if, as expected, the bank sets a new profit record.

These bonuses will be paid for by the American people. Besides receiving over $10 billion in cash from the US government last year, Goldman Sachs was the largest beneficiary of the government bailout of American International Group (AIG), receiving $12.9 billion to cover funds owed to it by the failed insurance giant.
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The Obama administration marked with little fanfare a major milestone in its bank rescue effort — its decision on Tuesday to let 10 big banks repay federal aid that had sustained them through the worst of the crisis — as policy makers and industry executives focused on the challenges still before them.

“This is not a sign that our troubles are over,” President Obama said. “Far from it.”

While the announcement had been expected for weeks, the official word put the administration’s imprimatur on a corps of big banks considered healthy enough to extricate themselves from Washington’s grip.
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