The cost of the federal bailout of the financial sector continues to climb, now reaching $8.5 trillion, as the government last week announced another trillion-dollar tranche of funding for failing institutions.
The total federal refinancing of the banking industry is equal to half of the entire economic output of the U.S. economy for this year.
New rescue projects announced by Treasury Secretary Hank Paulson and the rest of the Bush administration during Thanksgiving week included: $600 billion to lower mortgage rates, $200 billion to spark consumer loans and another $300 billion to provide ballast for ailing Citigroup.
Ominously, analysts are warning that the country's next financial crisis may indeed come from having to deal with the overwhelming cost of the mounting debt.
The total extent of the federal debt haven't even been imagined, yet. President-elect Barack Obama and his economic team — Christina Romer, Larry Summers and Tim Geithner — are poised to enact an economic stimulus program next year of up to $700 billion.
The stimulus spending will most likely cause Obama to scale back ambitious plans to revamp health care financing, press reports indicate.
Sen John Kerry (D-Mass.), incoming chairman of the foreign relations committee, is telling Europeans at an environmental summit in Poznan, Poland this week that Obama is also going to have to retreat on his plans for a "green economy" because of the U.S. economic situation.
"We have to figure out what is achievable, given our economic realities," Kerry said, according to a report in the U.K. newspaper, The Guardian.
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