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Bailout may cost trillions ... or not

Even if it adds up to $8 trillion, the final cost will be lower as US sells the assets it's now buying.

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A trillion dollars here and there, and soon the US government's financial rescue programs start adding up to big money.

But how high is the cost, really?

One tally, which puts the Great Bailout somewhere north of $8 trillion, has been making the rounds in news reports, on websites, and on Capitol Hill. At that rate, some people ask if we could just use the money to cut every American a $26,000 check and kiss the recession goodbye.

The reality, however, is that the government really isn't committing that large a sum to rescuing the economy. The vast bulk of the rescue efforts are loans or investments – and will end up as a mix of gains and losses to government.

That doesn't mean the cost will be small. Just the rescue of mortgage linchpins Fannie Mae and Freddie Mac could run into hundreds of billions of dollars.

What's clear is that the Treasury and Federal Reserve have raised their own exposure to the performance of the US economy – in the hopes of reviving it.

"That's a calculated bet," says Brian Bethune, an economist at IHS Global Insight in Lexington, Mass. "In terms of the cost of the whole thing ... it gets down to how many of the assets have permanent reductions in value. It's hard to say at this point."

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