Pick A Number, Any Number. Okay $700 Billion

Good pick!

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

As as us forecasters like to call it, “A number pulled from one’s ass.”

Yet another reason to oppose the current bail out plan. It basically gives Paulson $700 billion to distribute as he sees fit. At this point I say, simply add $700 billion to the economy via Federal Reserve actions. It is based on just as much analysis as the Paulson plan.

What is even more amusing is that the keystone kops, a.k.a. the Bush Administration, didn’t get the memo out in time to everyone about how the $700 billion number is generated,

Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.

So which is true? The $700 billion was pulled out of Paulson’s posterior (or Bernanke’s Butt) or it was the result of some sort of analysis?

FILED UNDER: Economics and Business, Government, US Politics
Steve Verdon
About Steve Verdon
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. He joined the staff at OTB in November 2004.

Comments

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  2. Michael says:

    “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

    Holy shit, that’s the most frightening thing I’ve heard during this entire crisis.

    Not just that $700 billion may be way more than is needed, but that it may be way less than is needed. He’s basically saying that even after we sink $700 billion in taxpayer dollars into these companies, they may still collapse!

  3. Steve Verdon says:

    Yep.

  4. Michael says:

    Yep.

    Wouldn’t it make more sense to just take $700 billion to a Vegas casino and put it all on black? I mean, at least then you’ve got a 50% chance of not losing it all.