The Bailout is Now A Trillion Dollars More Expensive than World War II. The Madness Must Stop
How big is the bailout? Bigger than World War II.
If we add in the Citi bailout, the total cost 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 billionTOTAL: $3.92 trillion
Are you getting that? We’re spending 39 times more money in the bailout than we spent to rebuild almost all of Europe after World War II.
This bailout, which we’ve been told is the only thing that can save us from a collapse as big as the Great Depression is nine times bigger than the New Deal which was put in place to get us out of the Great Depression.
Nine times. Are you kidding me? Do you understand the mania at work here?
The very members of Congress who are telling us how badly we need this bailout don’t hesitate to tell us just how expensive the Iraq War has become. Barack Obama himself must have told us almost every week how expensive the war was and how we didn’t need to spend all that money, yet he’s laying out enough to fight the past six years in Iraq eight times over.
That $4.616 trillion is over a third of our total GDP for last year. In other words, every penny’s worth of value our country produced last year – every single thing that’s been made and every single second of everyone’s labor – from January 1 at Midnight to May 4 at 2:40 A.M. is going to pay for this bailout.
This is madness. We have to stop it.
Other Posts of Interest:
- Yeah, We’re Idiots for Listening to Them
- Are There Any Good “Bailout” Ideas at this Point?
- Hey Congress? Stop Helping.
Category: Featured, The Economy and Your Money
How?
I honestly don't know. I know what Congress has given can be taken back and some of this money isn't going out the door right away. Perhaps there are ways to gum up the works until we can get folks in there in 2010 who can rescind the whole mess.
Alternately, I'm thinking a lawsuit may be in order. For the life of me, I can't see how any agency can spend money that's not yet been appropriated. To my knowledge, the only money that's been approved is the 700 billion that was voted on before the election. Everything else has yet to be officially given out and if a dime that has not been appropriated does get out, Washington should be hit with so many lawsuits that it'll look like snow for all the white falling down.
The number you quote includes debt guarantees…and lending programs that will require collateral from the financial institution…so it's not totally expenditure, if that makes you feel any better.
Not a lot, EricH. I've seen estimates including a lot more of those guarantees and collateralized loans that push the total well over 7 trillion dollars. That's insanity right there.
Forget small government and libertarianism. That's at least corporatism (which in bygone days tipped very neatly over into fascism). There's no way they can make their proposals work. They're simply way too big. The only thing they can do is to throw tons of cash out and hope that it makes for a soft landing.
Taking a break from politics for the holiday.
Happy Thanksgiving!
You don't really seem to know how accounting works. We're talking about 1/2 trillion in cash and the rest in securities, loans, and asset purchases. A lot of this seems to be in special preferred stock which will pay good dividends. What's disturbing is the lack of Congressional oversight. It would be nice to know just what kind of deals we're really getting. I can understand why we wouldn't want to mark to market these assets right away. But a monthly mark to market report to Congress would be nice. I remember when we bailed out Chrysler. They paid back the loan ahead of schedule and the Federal government actually made money on the deal. And so did Chrysler. But there was a lot of oversight on that deal. What's happening now is happening with the typical Bush Administration secrecy. And that's not acceptable. We need to guarantee a return of two points over the TED. And maybe we will get that return, but we won't know if the administration won't report on what they're doing. So let's see what they're doing. I don't expect it to be up to Buffett's standards, as we're fishing downstream from him. This kind of bailout can still be managed profitably for everyone. But the administration's insistence on a lack of accountability is not helping. With Bush's secrecy, how do we know?
Oh, and happy Thanksgiving. And do you want a wager on the Redskins- Giants game? The spread is 3.5. And I can send you some Rocky Mountain Oysters against your Chesapeake Bay Oysters. I don't eat shellfish, but my friends do. And the Rocky Mountain version may seem a little weird, but they're good. But you have to eat two. That's just the way they serve them. But you can suggest any wager.
Happy Thanksgiving to you, too, tom. No wager (I'm not much of a betting man). I do think the 'Skins will cover the spread. If they can find some offense, it's likely to be a very close game. If not, then not. But I think they'll find enough to keep the Giants honest.