Yesterday’s announcement that the government will push another $800 billion into the imploding financial system has brought the taxpayer’s total commitment to $8 trillion.

The latest installment – jointly from the Federal Reserve and the Treasury – is aimed at loosening the mortgage markets and encouraging new loans to consumers. And according to the Wall Street Journal, there were signs yesterday afternoon that it may work: Some 30-year mortgage rates sank a half-percentage point yesterday.

The latest package sets aside $600 billion for the Fed to buy "debt issued or backed" by Freddie Mac, Fannie Mae and other government-backed lenders. It also added to the alphabet soup of the bailout, by creating the "TALF" – the Term Asset-Backed Securities Loan Facility – which is a $200 billion pool of money that the Fed and the Treasury plan to use to make cheap loans for people who want to trade in consumer debt or business loans, according to the New York Times.

The constellation of hand-outs has become so baffling that both the New York Times and the Wall Street Journal both deploy heavy graphics to try to lay them all out.   

The $8 trillion figure consists of investments, loans and guarantees made by the Fed, the Treasury and the Federal Deposit Insurance Corporation. According to the Times graphic, only (only!) $1.3 trillion has been spent. The rest is what is available to be spent under the programs announced so far.

How does that number compare to other eye-popping expenditures in the past? It’s more than the cost of the Korean War, the Savings and Loans Crisis, the Louisiana Purchase and the Marshall Plan combined, according to the Journal. And that’s before President-elect Obama tells us the details of his economic stimulus plan and how much that will cost.

While yesterday’s package appears to have given the mortgage market a bounce, it still does nothing to address the problem of subprime mortgages, because Freddie and Fannie held very few of the worst loans. Nor will it do much to stem foreclosures. As we wrote yesterday, the only government plan to address floundering mortgages seems to be making little headway.

And Paul Krugman says yesterday’s announcement "confused" him:

The GSEs [government-sponsored corporations Fannie and Freddie] have been nationalized. Their obligations are already U.S. government debt …

The Bush administration, weirdly, has refused to declare that GSE debt is backed by the full faith and credit of the U.S. government. Why not just make that declaration, turning GSE debt into Treasury obligations, rather than stuff the obligations onto the balance sheet of the Federal Reserve?

The first audit of the original $700 billion bailout – the Troubled Asset Relief Program –  is due next Tuesday, and the New York Times reports that it will criticize the program’s "failure to set up ways to track how its bailout money is being used in the marketplace" and will "call for tighter controls over the conflicts of interest that are arising as financial specialists, institutions and law firms are hired for Treasury work that could later aid their private-sector clients."