Legislative and regulatory actions taken in response to the financial turmoil which occurred between 2007 and 2009 expanded the extent to which financial institution liabilities were protected by federal government guarantees: i.e., these actions expanded the federal financial safety net. How large has the safety net become? Walter and Weinberg (2002) measured and examined the size of the safety net as it stood in 1999. We estimate the size of the safety net as of the end of 2008, after the creation of a number of government programs meant to back financial liabilities. We use methods similar to those employed by Walter and Weinberg and find that the safety net has expanded significantly. We briefly describe our results and provide a table detailing them.
(This paper builds on a Winter 2002 Cato Journal article.)