Who'll Bail Out Uncle Sam?

(CBS)  By CBS News White House correspondent Mark Knoller.

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The federal government may seem like a financial knight on a white steed riding to the rescue of big companies in trouble. The irony is that Uncle Sam's got enormous money problems of his own.

The government is far deeper in debt than any of the companies it's bailing out.

As of this morning, the national debt stands at over $9.634 trillion. That's trillion - with a "T." And that's nearly $4 trillion more than it was on the day President Bush took office.

This year alone, it's costing taxpayers more than $230 billion just to pay the interest on the national debt.

And it's getting bigger every day thanks to the relentless rush of the government spending money it has to borrow. The federal deficit for the fiscal year ending September 30 is expected in the range of $400 billion - close to the all-time high.

In fact, the government doesn't have the $85 billion needed to bailout insurance giant American International Group.

The treasury department announced this morning it would auction new debt to raise funds for the Federal Reserve's rescue plan for AIG.

The Fed didn't need President Bush's permission for the bailout, but he supports the action.

"The president's economic advisors had determined that some of these companies were so big - that to allow them to fail would have caused even greater harm and damage to the economy," explained Press Secretary Dana Perino at today's White House briefing.

And despite the government's intervention to keep a distressed company from failing, Perino insists "the free market is alive and well."

"We have systems in place here in our country to be able to deal with shocks to the system like this," she said.

The rescue plan means taxpayer funds are being put at risk, but Perino said "taxpayers might be harmed even worse" if the collapse of a major company caused broader economic damage.

She declined to repeat President Bush's oft-stated assurance that the "fundamentals" of the economy are strong. But she said the economy has the strength to deal with the strains it's now facing.

"We'll weather the storm and be better for it," she asserted.

But where does the federal government go when it needs a bailout? Taxpayers need only look in the mirror.

[vsg4]

"Look at the do-nothing Congress run by Pelosi. Brilliant Pelosi...a woman who can''''t motivate one member of Congress...

Posted by CarlyLaine at 07:54 AM : Sep 18, 2008"

Out of last years, only last 8 months the congress has Ms. Pelosi. Past 7 years we have id...s in the lead in the congress authorizing this Prez, barrow 4 trillions and out of which 1 trillion went to war. And Halliburton is making 2 billions net profit per quarter. What kind of id...s made this mess ? You id...s have any idea how much dollar worth now against international currencies ? When internal debt 9.6 trillions + external trade deficit 6 trillions and budget deficit exceeds the GDP 13.5 trillions that country''s currency is worth less. Mission accomplished is n''t it ?

[sleepyric]

thank you GWB, for allowing your "free market" policies to turn us into a third world country. Thanks again. I know you feel our pain, while you roll around in your profits from the Defense industries and laugh at the little people.

[nyer911]

Ralph Nader foresaw this melt down of the financial markets back in 2000 and in July warned congress http://nader.org/index.php?/archives/1427-Letter-to-Senator-Dodd-and-Congressman-Frank.html that the federal government''s bank insurance fund may be insufficient to handle the developing crisis in the banking industry. He is the ONLY Candidate running for President who''s offered America a clearly defined way out of the corruption the Washington political machine has embraced. His voice is being silenced by Corporate run media and Americans owe it to themselves and their country to listen to what he has to say..
http://www.votenader.org/issues/#more

He''s the only Candidate who is not beholden to corporate interests and offers you REAL CHANGE. Let him in the Debates!

[one8436572]

hmmm, so you are saying that we are fortunate that the white knight uncle sam has bailed out aig so that we wouldn''t have to, but that we might want to consider who will help the white knight if he is ever in trouble?

knoller, you micro mind, tell me again please, who is the white knight?

[samthetvcat]

---"The french have made it mainstream and safe."---
Posted by ainttaken

That''s an awesome point - the fear of nuclear fallout is probably what''s holding progress back, but yeah if France can do it . . .

I wonder what the rate of contamination really is these days, it''s probably one of those things that everybody''s terrified of but in reality you have greater chance of getting struck by lightning or whatever . . .

I don''t know . . .

[samthetvcat]

Does China still want to cover our loans or are we at the point where we''re going to have to start relying on the Saudis or the Russians.

There''s like that dimension too - what would motivate an investor to want to buy up US debt? The return on investment hasn''t been the draw in a long time . . .

Everybody''s talking about regulation, but take a look at it from another perspective. What Wall St does is invest in the most promising growth ventures in the country. So yes Wall St. is greedy, but how promising were the growth ventures in the country for Wall St. to invest in? The overinflated housing market was about it.

Contrast that with the countries who are likely to be picking up our debt - the Saudis and the Russians have oil, and China''s got cheap manpower.

Let''s not lose sight of the need to take action to grow the economy so we can hold our own.

Like in the big picture do more stimulus checks help or hurt? Or does the act of okaying more nuclear power plants as a job creation and energy creation plan make more sense (?)

Tough argument to make though in this climate . . .

[lviala]

BAIL OUT OF AIG: If the government is going to bail out corporations because the executives, officers, and directors were incompetent, then these incompetents should NOT get their millions of dollars in exit packages. If they ran the company into the ground and the employees and investors are left with nothing those responsible should be left with nothing. There needs to be consequences for mismanagement to the extent where the company fails and needs a bail out.

[chrisbieber]

great...socialism comes to America in the name of capitalism....and bipartisan PLANNING....the Fabian Socialists had a good plan which took over England...guess their pals here followed the playbook and took our country over..great..

[bozworth4]

The problem is that not enough people are willing to take a bite. They cower around waiting for someone else to do it.


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Posted by cbsfan731

Enough people have tried, but as you know they are branded as zealots, radical, or the modern term used, subversive to the rules of the land. Welcome to the new world order. No republicans or democrats only politicians that would pimp their mother for a euro, yen or dollar.

[bozworth4]

I wonder, will the chinese auction off government property or will they just seize it for their own use? Will arlington be a good site for a shopping mall? Will the pentagon make good public housing? Will alaska make a nice winter retreat for the ruler? Will The grand canyon make a good security prison for law breakers? The list goes on.