The true total of Federal Reserve emergency lending to Wall Street is not $1.2 trillion, as Fed Chairman Ben Bernanke contends, nor the $7.7 trillion figure reported by Bloomberg News, which Bernanke publicly contests.
The real number, argues economist L. Randall Wray, is a staggering $29 trillion.
Wray writes that Bernanke's recent defense of the lower figure is "misleading" and that the chairman's claim that Fed bailouts do not constitute a form of spending is plain wrong.
"If he really believes the last claim, then he apparently does not understand the true risks to which he exposed the Treasury as the Fed made the commitments," writes Wray, a professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College, NY.
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