The Bailout Barometer

BarometerResearchers at the Richmond Fed estimate that some 61% of all private financial liabilities have been explicitly or implicitly guaranteed by the Federal Government–that’s up from less than 50% in 1999.

The biggest explicit guarantees are for banking accounts through the FDIC, the guarantees for Freddie Mac and Sallie Mae and guarantees for private pension accounts. The biggest implicit guarantees are for bank accounts greater than $250,000 and money market funds.

See here for greater details.

It’s a strange capitalist society that guarantees so many private financial liabilities. There are good and true arguments for each element in the list, of course, but don’t commit the fallacy of composition. Many good and true arguments can add up to a bad and false conclusion.



Comments for this post are closed