Bailout Tops $5 Trillion Dollars
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Steve Verdon | Thursday, November 13, 2008 |
Yay!
For all the fury over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis.
According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.
Lets be clear, this is an amount that is over 1/3rd of the countries annual GDP that has been earmarked for propping up institutions that have failed. Institutions that have made bad business decisions.
Yippeee, we are all Fordists now. With just the right planning this economy with be the b3st!
About the Author: Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research.
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- Incentives Matter
- Reinhart and Rogoff on the Financial Crisis
- Taxpayer Risk: $9.7 Trillion
- Too Big to Fail For A Reason
- More Anti-Stimulus Arguments
- Fannie Mae and Freddie Mac Bailout Debacle
- Do Zeroes Cure Inumeracy?
- The American Pundit linked with Bailout Now About $5 Trillion
So there is a choice between democrats who want a welfare state for the poor, and republicans who want a welfare state for the rich. Isn't there anyone who believes in free enterprise ... ie you're rewarded by the market if you make good financial decisions, punished by the market if you make bad decisions?
od, yes, there are still a few people who still believe in free markets, but few in power and even fewer in Big Media apparently.
As to your initial comment regarding the rich and poor, if the Republicans base is rich people then the only way they can expand their base is by making more rich people, whereas if the Democrats base is poor people then the only way they can expand their base is by creating more poor people. Once you break the code, it all starts to make sense.
Those days are sadly long gone and we've probably only seen the tip of the ice burg. For what it's worth, welfare for the rich would be a bigger benefit to the everyday schmo.
1 Rentenmark = 1,000,000,000,000 Papiermark
This confounded article doesn't deserve a comment, but here I am..........
Nevermind, forget it.
Isn't this subject worthy of a more credible source than Forbes and a more critical examination than what you have given it?
Those days are sadly long gone and we've probably only seen the tip of the ice burg. For what it's worth, welfare for the rich would be a bigger benefit to the everyday schmo.
I've heard it argued both ways, but neither sounds even remotely convincing - I think so long as there aren't consequences for mistakes the economy is going to be in trouble either way. Screw up, big time or small time, and the government will bail you out - its hard to see how that can breed anything but disaster.
Holy hell. $5 trillion? Is that what has been allocated so far, (god forbid) what has actually been spent, or what is projected to be spent?
I sincerely hope it doesn't run that far, if it's the latter. I don't particularly look forward to having Japan-levels of government debt.
Steve Verdon: "This is the biggest bailout in the history of the country."
Homer Simpson: "This is the biggest bailout in the history of the country, so far."
Most of that figure is the nationalization of Fannie and Freddie. Since they were always assumed to be backed by the government, it's a little misleading to say that they were really bailed out. We were always on the hook for it, it was just off-balance sheet until recently.
Not to say though that your larger point isn't entirely correct...
Holy hell. $5 trillion? Is that what has been allocated so far, (god forbid) what has actually been spent, or what is projected to be spent?
Suddenly found your inner libertarian or what?
It is what has been both spent and allocated. Well spent, loaned and allocated. More to come as well. Obama wants $50 billion for the auto industry.
"It is what has been both spent and allocated. Well spent, loaned and allocated. More to come as well. Obama wants $50 billion for the auto industry."
Posted by Steve Verdon
In other words, he wants ~7% of the Wall St bailout.
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