Taxpayers Funding Mega Banks With $83 Billion Annually

Anthony Gucciardi
by
February 22nd, 2013
Updated 04/08/2013 at 8:45 pm

Mega banks not only take your financial deposits and subsequently create absurd amounts of non-existent fiat currency to spend intro oblivion, but they are actually being explicitly funded by United States taxpayers to the tune of $83 billion per year.

In reality, banks are very fragile. A single bank holiday could collapse the entire industry, and we have seen the government step in between the free market and the mega banking conglomerate more than a couple times to inject multi-national banks with a financial surplus. It is this fragile nature that can also be found in the actual profitability of the banks. As it turns out, United States taxpayers are generating a shocking amount of income for bank shareholders through inflating the credit ratings of mega banks.

mega banksIn a report by Bloomberg, it is revealed that since the mega bankers are generally seen as ‘too big to fail’ (after all, if they begin to decline the government will surely save them), their credit worth is inflated to a large degree. With the hand of the government propping up the backs of these banking institutions, it allows them to borrow for much lower than what reality would dictate. As International Monetary Fund (IMF) data explains, the taxpayers end up paying for the borrowing costs of these banks through implied government assistance.

Based on the data, the top 10 largest banks receive 0.8% of their assets through this mechanism. It doesn’t seem like much percentage wise, but when you bring in¬†$9 trillion worth of assets, it becomes expensive.

$83 Billion Taxpayer Dime ‘Transferring to Bank Shareholders’

Just the top five banks alone account for $64 billion in government-directed borrowing deductions that serves to pay off bank shareholders. Bloomberg even states that the system, which turn into profits for the banks, are “…essentially transfers from taxpayers to their shareholders.”

A statement that is not surprising, given the fact that in 2006, CEOs and executives made an average of $1,723 for every single dollar made by the US workforce. Does that mean all CEOs and executives are bad people? No, but it means there has been a real financial paradigm shift since decades ago where the average CEO made only $40 for every dollar generated by the average employee. And when it comes to indirectly funding these individuals with $83 billion verses workers who are making dirt by comparison, then there is a problem.

This is especially true when considering that if the banks were not receiving this reduced borrowing assistance, they actually would be in a much more dire state of finances. When we look at the top five banks:

  • JPMorgan
  • Bank of America
  • Citigroup
  • Wells Fargo
  • Goldman Sachs

We find that the income from taxpayer-assisted credit upgrades is actually comparable to their overall annual profits. What does this mean? It means that without government backing injected into these mega banks by the United States government, they’d actually have to change their dreadful business practices. Perhaps they’d even have to focus on customer service or transparency. This is something that they simply cannot have.

Bank of America, for example, has been caught up in a large degree of fraud, with even the Justice Department seeking $1 billion for their defective mortgages. Yet we still shovel$83 billion a year to funding these banks through government ‘guardian angels’ despite the banks doing nothing to repay the debt.

Can you imagine what would happen if taxpayers awoke to this fact, demanded change, and left the banks to fix their own problems? Free money would no longer support their scams, frauds, and generally awful practices.

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Category: Finance

Anthony Gucciardi

About the Author ()

Google Plus Profile Anthony Gucciardi is the creator of Storyleak, accomplished writer, producer, and seeker of truth. His articles have been read by millions worldwide and are routinely featured on major alternative news websites like the infamous Drudge Report, Infowars, NaturalNews, G Edward Griffin's Reality Zone, and many others. He is also a founding member of the third largest alternative health site in the world, NaturalSociety.com.

Comments (5)

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  1. F-Bomb says:

    Thanks so much for this information! More people need to know that while we face "sequestration" and economic "downturn", the amount of money the government spends on corporations that are too big to fail and on imperial wars continues to grow! The robber barons can continue to legally squeeze the sheeple who are working their butts off just to make ends meet.

  2. It's good to learn how Mega banks funding 83 billion annually. It's a lot of money and hopefully US government has full aware of that amount Mega banks having within. I guess taxpayers would react quite differently when some more tax increment comes their way. Thanks.

  3. $83 billion is a lot of money and indeed!! I'm quite surprised to learn how such huge amount money banks are appetizing without any response. We are facing economic crisis since long time how we are not going to face this when mega banks named title having such luxury of not repaying debt properly.

  4. cosuri cadou says:

    Wow, if what you're saying inthis article is true, we have a pretty big problem. Actually, we as customers not so much, but banks do. unfortunately, people will never take out enough money from any bank to ruin it, unless they somehow agree beforehand to do so

  5. potomacoracle says:

    U. S. Taxpayers ARE NOT FUNDING BANKS OR ANYTHING ELSE.

    THE GOVERNMENT OF THE U.S. ISSUES ITS OWN CURRENCY AND NEVER NEEDS REVENUE TO SPEND THAT CURRENCY. WHY WOULD IT NEED INCOME WHEN ALL IT HAS TO DO IS BOOT UP ITS COMPUTERS AND PRINTERS? THE FED GOV ONLY NEEDS AN APPROPRIATION TO SPEND, NOT MONEY FROM TAXPAYERS.

    HERE'S DEFINITIVE PROOF … Part 1. http://goo.gl/paGQBy Part 2. http://goo.gl/7YekjX

    TAX POLICY IN AMERICA MANAGES INFLATION AND FORCES US TO EARN DOLLARS WITH WHICH TO PAY TAXES.

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