Tomorrow is Abraham Lincoln’s 200th Birthday so it’s good that Tim Giethner, the US Treasury Secretary, has called for $2 trillion, as that's $20 billion to celebrate each year since Mr. Lincoln was born.
That's not why he's called for it of course, it's to further sort out the financial system and comes on top of the $838 billion economic stimulus approved by the Senate yesterday, and the $700 billion bailout package from last year.
Add in a few billion dollars for the auto industry bailout and the USA has just jumped into top spot for pumping cash into the system.
And when some of the $2 trillion comes from private investors, folks are wondering which investors will invest. For example, Paul Kasriel, chief economist at the Northern Trust, states that "not all of this is going to be lost to the taxpayer. The trillions they're talking about are not all taxpayer dollars paid out. But, obviously, none of this is free. We do have losses out there."
I like Mr. Kasriel, as he then follows it up with this classic quote when asked how much it will all cost in the end: "I don't, in all candor, understand a lot of it.”
Who does I wonder?
Certainly not Mr. Geithner who says: "as costly as this effort may be, we know the complete collapse of our financial system would be incalculable."
But then he does go on to say that “the financial system is working against recovery. At the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we need to arrest it.”
He’s right, so how many trillions will it take to get back on track?
David Oser, senior vice president of investments at ShoreBank Corp, comments: "They are making it up as they go along, because the alternative is to sit back and not do anything. They don't have the luxury of stepping out of time for a couple of months and figuring it out."
And there’s the rub as that’s spot on: no-one knows what the outcome of all this will be.
And that’s why the continual actions of governments are unnerving their citizens, because they sit and wonder how many more bailout and stimulus packages will be needed before the world gets a sense of reality back.
Mind you, so do I, my colleagues, the banks and the governments.
Maybe that’s why the regulators and policymakers are having such a good go at grilling the banks with eight of America’s top bankers to appear before a Congressional hearing today, including Lloyd Blankfein (Goldman Sachs), Jamie Dimon (JPM), John Mack (Morgan Stanley), Vikram Pandit (Citi) and Ken Lewis (Bank of America).
(Watch this space to see what happens).
I hope, but don’t expect, that they’ll get an easier time than the UK bankers in front of the Treasury Select Committee yesterday.