If we add in the Citi bailout, the total cost [of the bailouts] now exceeds $4.6165 trillion dollars. People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.
Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:
- Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
- Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
- Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
- S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
- Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
- The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
- Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
- Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
- NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
So, in less than two months, more money than the combined costs of our major expenditures over 200 years (major wars excepted).
Thanks to Bob for the link.
The math on this only works if you count loan guarantees as expenditures, which they’re not. Loan guarantees usually cost the government nothing. In fact, even asset assumptions usually end up costing the government very little.
Most of what is being done is loan guarantees, the result of which is increased liquidity that benefits us all. The money that has actually flowed out of government has by and large been used to purchase preferred stock in distressed financial institutions. That stock will eventually be sold back to those institutions, probably at some small profit. In the meantime, the additional capital keeps the banks liquid during what is surely a unique and temporary liquidity crisis.
Trillions of dollars are not, in fact, being spent, no matter what some people say.
“Trillions of dollars are not, in fact, being spent, no matter what some people say.”
Assuming these recipients don’t default on these loans.
I still somehow believe in beneficent government, within much tighter limits than I used to – it is true.
But they have done a piss-poor job of explaining to the American public where this cash is going, how it is going to help, what it means to my laid-off butt.
Where the hell is my fire-side chat?
And if the recipients DO default, we (the gummint) end up with assets, right?
And the head of WaMu home loans who made impassioned pleas to let the market take care of itself referring specifically to tightening regulation of sub-primes – still head of WaMu home loans.
It seems there is no reporting on where the money has gone so, while Tom’s point is correct based on the past, I’m not quite so sanguine that this group of CEOs aren’t more prone to pillage than their predecessors. They are bankers.
It may well be that the reason there is not coherent reckoning on where exactly the money is going is that nobody actually knows just exactly where the money is going.
And I too believe wholeheartedly in beneficent government. How I wish we had that in this country.