The bail out for a large financial institution that caused the Great Recession may not have been entirely fair.
But the bail outs for many banks and other financial institutions were certainly not fair, according to a report published on Monday.
The report, from the nonpartisan Congressional Budget Office, found that the bailouts for banks and credit unions amounted to a net increase of $1.6 trillion, which is equivalent to almost 2% of gross domestic product.
“The bailout package included billions of dollars in bailout subsidies, but the government has only provided more than half the amount needed to cover its bailout costs,” according to the report.
The CBO’s analysis also found that “bailouts to financial institutions in the form of direct grants and loans to small and medium-sized banks, as well as through loans and other forms of direct payments, are substantially larger than those to credit unions and mortgage-backed securities.”
The CBO report also pointed to the fact that the U.S. is the only industrialized country that doesn’t have a capital gains tax.
As a result, the CBO found that $3.3 trillion in net tax revenues were lost.
In contrast, other developed countries, such as Canada, have a cap on capital gains and have also seen capital gains taxes fall, the report found.
But even if you do agree with the CBO, the financial bailouts do not have to be the end of the world.
They are just part of the economic system that is supposed to make life better for ordinary Americans, said Scott Reed, an economist at the Center for Economic and Policy Research.
Reed noted that the federal government has been doing well financially for decades, with no major economic downturn in decades.
The bailouts are an example of the federal bailouts having a “disproportionate effect,” Reed said.
“If you take out the subsidies, the cost of the bailout is very small,” he said.
But he added that the subsidies “do not provide enough cushion to keep the bail-out program solvent.”
“The problem is that this subsidy program is largely a bailout for a handful of financial institutions,” Reed added.
The government has already put $1 trillion in new bailouts to some of the nation’s largest financial institutions, such the banks, and has yet to provide any further money for the bail program.
In addition, the government is now making the bail loans directly to small businesses and retirement plans, which are often the least-populated parts of the economy.
As of April, roughly two-thirds of all small businesses in the U: were insolvent.
So it will take years before the bail money is fully repaid, Reed said, adding that many small businesses that have already paid out their money have already been forced to take on more debt.
The federal government will be able to borrow to keep going, but it won’t be able borrow as much as it needs to, so the country is likely to experience a recession, Reed added, according.
He noted that it is not yet clear how much money the government will need to keep its economy afloat.
“You will see a period of adjustment, but you are going to be in a recession,” Reed noted.
The president of the Financial Services Roundtable, which represents the biggest financial institutions and has lobbied hard for the bailout, said that the president will work with Congress to provide the money the banks need to avoid another recession, according the Associated Press.
“I think the president is aware that the bailout is a necessary measure and he will work very closely with Congress on that,” Jeffrey S. Bergmann told the AP.
“We are going forward with this and the president has a lot of experience working with small businesses.
And so we have good communication on how to achieve this.”