This Year’s Subsidy to Wall Street = the Amount of This Year’s Sequester Cuts
(Cross-posted from Occupy Underground.)
Occupy Wall Street ?@OccupyWallStNYC
At 11:59 tonight, remember the #sequester cuts kicking in are exactly the amount we bailed out Wall St this year.
http://www.washingtonsblog.com/2013/02/this-years-subsidy-to-wall-street-the-amount-of-this-years-sequester-cuts.html#.US_yiFwwnHY.facebook …
Since we’ve bailed out the 10 largest banks $83 billion this year alone, should they give it back to us by paying into the U.S. Treasury the amount of this year’s sequester? After all, it’s the same amount.
On February 20th, Bloomberg News editors headlined, “Why Should Taxpayers Give Big Banks $83 Billion a Year?” and issued the first-ever thorough and current analysis of the taxpayer-subsidy to the Wall Street mega-banks. They found that this subsidy is $83 billion this year, but they made no note of the fact that this amount is only $2 billion less than this year’s sequester cuts are estimated to be, so that all that would need to be done, in order to avoid those cuts, would be to have those mega-banks that we bail out every year forego their subsidy from taxpayers, for just one year. Unfortunately, this would be easier said than done.
That $83 billion subsidy this year is, according to Bloomberg’s, also approximately the amount of profits that those banks are “earning” this year. So, if the mega-banks wouldn’t refund it out of what we gave them last year, then they could just refund it by paying to us – who, after all, bailed out their stockholders enormously in 2009 – the “profits” that they made this year.
The editors at Bloomberg News (hardly a bunch of populists) calculated this $83 billion figure based upon their analysis of the figures in a sadly ignored but rigorous study that had been done by IMF economists, a study that had been issued months back, in May 2012, and which was titled “Quantifying Structural Subsidy Values for Systemically Important Financial Institutions.” As Bloomberg’s editors summarized the reason for this ongoing federal subsidy: “The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail,” due to the special Government backing for too-big-to-fail (TBTF) institutions.
(More at the link.)
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