The 'let's bail out eveyone' plan


Treasury has a program totaling $799 billion to bailout banks. AIG (NYSE: AIG) is getting at least $123 billion. The auto industry has been given $25 billion in loan guarantees and it likely to be back for more.

Now there is talk of the federal government aiding insurance companies. Why not? According to The Wall Street Journal, "The availability of U.S. government cash in the middle of a global credit squeeze is drawing requests from insurance firms, auto makers, state governments and transit agencies."

Some of the money to help other industries could come from the $700 billion already approved by Congress. But, it won't be enough. Money center banks could post losses all the way through next year. Several analysts think Citigroup (NYSE: C) may not make money until 2010.

The one thing that is clear now is that the price of keeping all of these industries afloat is going to be well in excess of $1 trillion. If the government wants to give direct aid to mortgage holders, the commitment will go up even more.

The sum needed for the bailout will be so huge that $700 billion will seem modest.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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