A report by CNBC finds the US share of the European Bailout could rise to $50 billion and higher:
The US exposure to the European debt bailout could be at least $50 billion, but the chance of taxpayers actually being on the hook for that appears remote.
The actual number is unknown; It may depend on European country asking for a bailout:
Determining the exact amount of exposure is nearly impossible until governments start stepping up to the window created by the European Union and the International Monetary Fund to stem the crisis in Greece and elsewhere on the continent.
But one rule-of-thumb formula puts potential US exposure at $54 billion should the entire IMF loan fund be tapped.
The Program nick-named Le Tarp because it was similar to the US Trouble Asset Relief Program involved in currency swaps ( while TARP dealt with credit default swaps which contributed the financial collapse in 2008):
And the entire bailout package has been nicknamed “Le Tarp” by some for its similarity to the Troubled Asset Relief Program that bailed out US companies with taxpayer-backed loans.
Critics including the GOP say the US shouldn’t be involved:
US involvement in the European crisis already has drawn critics from Congress and economists who think the domestic financial issues should be cleared up first.
“Inflation and debt is not the answer to a problem caused by inflation and debt,” said Michael Pento, chief economist at Delta Global Advisors and a critic of both the European plan and the Fed’s approach to US fiscal stability. “It’s a European problem that should have been dealt with by Europeans.”
In Washington, Senior administration officials said taxpayers will not be liable for the European bailout. (See video)
The US is a participant in the IMF, which has agreed to work with the European Union to help countries that come under debt duress.
The IMF has pledged a one-third share of the 750 billion-euro ($952 billion) rescue package—typical of the fund’s arrangements with central banks in such cases.
That would come to 250 billion euros, though that is only a rough figure and dependent on a variety of circumstances, according to an IMF official who spoke on condition of anonymity because of the uncertainty still involved.
The US would be responsible for 17.09 percent, or $54 billion, of the cost using a quota contribution system the IMF uses in such instances. The US is the leading contributor under the quota setup.
CNBC has the rest of the story.