Bailout in Trillions?

Forums: Economy, Bailout, Worry
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http://abcnews.go.com/print?id=6332892

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...The government's financial bailout will be the most expensive single expenditure in American history, potentially costing around $7.5 trillion -- or half the value of all the goods and services produced in the United States last year.

In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion. The bailout will cost more than the total combined costs in today's dollars of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing, according to data compiled by Bianco Research.

It remains to be seen whether the government's multipronged approach to bail out banks, stimulate spending and buy up mortgages will revive the economy, but as the tab continues to grow so does concern over where the government will find the money.

Monday the government guaranteed an additional $306 billion to bail out Citigroup, and today Treasury Secretary Henry Paulson pledged $800 billion to make credit more available to consumers and small businesses, and to buy up mortgages from Fannie Mae and Freddie Mac.

Congress last month allocated $700 billion for an emergency bailout of some of Wall Street's most storied firms by purchasing their troubled assets. The funds allocated through the Troubled Assets Relief Program are but a small part of the government's overall bailout spending.

Bailout programs also include a Federal Reserve plan to buy as much as $2.4 trillion in short-term notes called commercial paper that began Oct. 27, and an FDIC plan to spend $1.4 trillion to guarantee bank-to-bank loans that commenced Oct. 14, according to Bloomberg News, which first compiled the total cost of the bailout.

In March, the government spent $29 billion to help JPMorgan Chase take over Bear Stearns and allocated $122.8 billion in addition to TARP to bail out AIG, once the world's largest insurance company.

"No one really knows if any of this is going to work," said Barry Rithotlz, CEO of Fusion IQ, an online quantitative research firm and author of "Bailout Nation." ......

Somewhere around 6T gives you the $24000 per person number you hear on talk shows and what not

Very few Americans could simply write a check for 24K to Uncle Sam without blinking and most couldn't write it at all and if you figure children into it, you're talking about nearly 100K per family of four. That doesn't count the half of the population which now does not even pay taxes.

ASSUMING the multi-trillion talk is anything more than paranoia, the government likely has no way to come up with such a sum other than by simply printing it. Granted there is no rational or logical basis for money in the world at present, this is still an outrage and is highly likely to trigger inflation beyond anything America has ever seen.

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So next time youll think beyond electing some wild west douche bag like Bush and let him have his way with us armed with a GOP majority for 6 years.

Now some grown ups are gonna have to try to fix this mess.

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@farmerman,

The Fannie/Freddy thing is a pure democrat scandal. In the case of Detroit we have the funny observation that everybody else is making money making cars in the US and the big three actually make money making cars everywhere else EXCEPT the US...

What part of the problem is it that the pubbies have created, other than by rolling over while dems did all of the aforementioned??

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All it means is that the US is now a socialist republic made necessary from the debacle Bush created during his eight years in office.

The consequences of doing nothing would have put the US and world economy into a quickie depression that would have caused pain for all but the wealthiest amongst us.

There was a fire, and most governments knew they had to use whatever fire retardant they had available. The unfortunate consequence is the socialization of our banks and industries with money that really doesn't exist.

Only history will tell us if the right decisions were made; it was a matter of fighting fire with fire until all settles down into what can be termed as "normal" not seen before in the world economy.

There are some hopeful signs in the housing industry as interest rates drop below 5.5%. The government still has to take action to "create jobs." They must start with public works projects ASAP; not only to stop the bleeding in job losses, but to implement a stop-gap action that will return people to work and increase the tax base.

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@gungasnake,

Well lets see, The monetization ACt that was developed by Sen Gramm was passed and was the cause for most of the "defaukt swaps"

The energy efficient auto investment was pretty much pooh poohed by Bush in his early months and so Detroit destroyed all their energy efficient and hybrid prototypes (some of them were sold to the Japanese and GErmans)

Continued lack of stong oversight in the Bush years let the Freddie/Fannie issue (which extended back to Roosevelt and , in its original state was a really good idea), allowed the issue to get oiut of hand.

Im not denying responsibility for Clinton NOIT vetoing these investment pork bills, however, the issue of calling names is a way NOT to fix this.

You sound like someone who will spite his own face by ignoring the tough solutions that will be needed. If the GOP was so fuckin smart, why did they let this go on?

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@farmerman,

How can the GOP be smart? They were ready to have Palin become president of this country in the event McCain dropped dead. It seems the GOP is still considering Palin for president in 2012. Go figure (it ain't smarts by any stretch of anyone's imagination).

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there are still plenty of the these notes available in germany .
they were issued during the german "hyper-inflation" 1922-1923 .
a billion wasn't enough to buy you a loaf of bread , but that "inflation" sure was able to wipe out any debts the government (or corporations) had towards any citizens .
after the inflation ended - and these banknotes became worthless - some people used them to wallpaper their livingroom - as a "rememberance" .
hbg

http://www.linkezeitung.de/cms/images/stories/LZKoeln2/inflationsgeld.gif

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@gungasnake,

Quote:

In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion.

Which I understood had made a nice turn.

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Guru type friends who follow this stuff tell me the right-wing blogs and what not are waxing paranoid over nothing and that the 6-8T number would arise if every bank in the land failed, which is never gonna happen.

This one started out as a question and I assume that's the basic answer. They're telling me not to get into precious metals at present.....

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@gungasnake,

I have never had faith in precious metals as an investment - even in today's bear market and degrading economy.

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Bailout in Trillions?

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