Bloomberg has reported the government has pledged nearly 13 trillion dollars in an effort to unfreeze the credit markets but where is the money?

Financial Rescue Nears GDP as Pledges Top $12.8 Trillion

March 31 (Bloomberg) — The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008. link

In it’s infinite wisdom, our leaders failed to mandate that the money, or at least a large portion of it, actually be lent so the banks just kept it.

The following table details how the Fed and the government have committed the money on behalf of American taxpayers over the past 20 months, according to data compiled by Bloomberg.

                                  --- Amounts (Billions)---
                                   Limit          Current
Total                            $12,798.14     $4,169.71
 Federal Reserve Total            $7,765.64     $1,678.71
  Primary Credit Discount           $110.74        $61.31
  Secondary Credit                    $0.19         $1.00
  Primary dealer and others         $147.00        $20.18
  ABCP Liquidity                    $152.11         $6.85
  AIG Credit                         $60.00        $43.19
  Net Portfolio CP Funding        $1,800.00       $241.31
  Maiden Lane (Bear Stearns)         $29.50        $28.82
  Maiden Lane II  (AIG)              $22.50        $18.54
  Maiden Lane III (AIG)              $30.00        $24.04
  Term Securities Lending           $250.00        $88.55
  Term Auction Facility             $900.00       $468.59
  Securities lending overnight       $10.00         $4.41
  Term Asset-Backed Loan Facility   $900.00         $4.71
  Currency Swaps/Other Assets       $606.00       $377.87
  MMIFF                             $540.00         $0.00
  GSE Debt Purchases                $600.00        $50.39
  GSE Mortgage-Backed Securities  $1,000.00       $236.16
  Citigroup Bailout Fed Portion     $220.40         $0.00
  Bank of America Bailout            $87.20         $0.00
  Commitment to Buy Treasuries      $300.00         $7.50
  FDIC Total                      $2,038.50       $357.50
   Public-Private Investment*       $500.00          0.00
   FDIC Liquidity Guarantees      $1,400.00       $316.50
   GE                               $126.00        $41.00
   Citigroup Bailout FDIC            $10.00         $0.00
   Bank of America Bailout FDIC       $2.50         $0.00
 Treasury Total                   $2,694.00     $1,833.50
  TARP                              $700.00       $599.50
  Tax Break for Banks                $29.00        $29.00
  Stimulus Package (Bush)           $168.00       $168.00
  Stimulus II (Obama)               $787.00       $787.00
  Treasury Exchange Stabilization    $50.00        $50.00
  Student Loan Purchases             $60.00         $0.00
  Support for Fannie/Freddie        $400.00       $200.00
  Line of Credit for FDIC*          $500.00         $0.00
HUD Total                           $300.00       $300.00
  Hope for Homeowners FHA           $300.00       $300.00

After committing this extraordinary amount of taxpayer money to the so called ‘crisis’, small businesses, which are the lifeblood of the economy, still can’t get a loan.

Small business lending falls sharply

NEW YORK ( — Despite emergency stimulus measures, small business lending continues to fall. In the just-ended quarter, the Small Business Administration’s flagship program backed 30% fewer loans than it did a year ago, and 55% fewer loans than it did in 2007, before the recession set in.

The numbers bear out the grim reports from business owners who say that credit is dangerously scarce for small firms. The SBA’s 7(a) program approved 11,580 loans in the quarter ended June 30, valued at $2.5 billion. That’s down from 16,490 loans, worth $3.4 billion, in the same quarter last year. link

Now our government is passing laws which will divert billions in small business contracts to corporate giants, once again leaving small businesses to suffer and fail.

New Bill Could Divert Billions in Small Business Contracts to Corporate Giants

ETALUMA, Calif., June 29 /PRNewswire-USNewswire/ — For the second time in the last year, the House of Representatives Small Business Committee has passed legislation that will change the definition of a small business to give some of the nation’s wealthiest investors billions of dollars in federal small business contracts.

The bill, H.R. 2965, the Enhancing Small Business Research and Innovation Act of 2009, was introduced to reauthorize the Small Business Innovation Research (SBIR) program, which is set to expire on July 31st of this year. However, language in H.R. 2965 will change the definition of a small business from the current definition of “independently owned” to include businesses owned up to 49.9 percent by a single venture capital firm, or 100 percent owned and controlled by multiple venture capital firms or syndicates.) link

Combine this with all the other red tape, regulations and taxes heaped upon the small business owner and it’s no wonder unemployment is rampant.

US loses 467,000 jobs, unemployment at 9.5%

WASHINGTON: US employers cut 467,000 jobs in June, far more than expected, while the unemployment rate rose to 9.5 percent, the government said on Thursday in a report that showed a labor market continuing to struggle with a deep recession.

The June job losses were more than 100,000 greater than the 363,000 consensus of Wall Street economists polled by Reuters and broke a four-month trend of moderation in job losses. link

Remember that Obama promised to raise taxes on everyone making $250,000 or more, which includes most of the small business owners  in America. Talk about adding insult to injury in a tough economic climate.

This administration needs to realize that it is exactly the small business that drives the economy and there needs to be policies in place to encourage entrepreneurship, not discourage it. I won’t be holding my breath waiting for that to happen.

We truly live in a climate of corporatism, where businesses are either too big to fail or too small to survive.