The short answer: a lot. The long answer: depends on how you look at it. Whatever your viewpoint, here’s how $700 billion - the figure inked in the initial dead-in-the-water government bailout bill for Wall Street - compares to other vast sums. NASA in fiscal year 2009 will launch several missions into space and pay for hundreds of people to operate a host of space telescopes and even remote robots on Mars and run a PR and media department that puts most large corporations to shame. The agency’s budget: $17.6 billion, or 2.5 percent of the bailout sum. The National Science Foundation (NSF) has an annual budget of $6.06 billion to support research and education on astronomy, chemistry, materials science, computing, engineering, earth sciences, nanoscience and physics (among others) at more than 1,900 universities and institutions across the United States. You have to turn to much bigger initiatives, like war and defense, to get beyond this chump change and approach the bailout figure. From 2003 through the end of fiscal year 2009, Congress has appropriated $606 billion for military operations and other activities associated with the war in Iraq, according to the Congressional Budget Office (CBO). The entire military budget for fiscal 2008 is $481.4 billion. Social Security is a $608 billion annual program. Many analysts fear the bailout because the cost must ultimately be borne by taxpayers. Based on the U.S. Census Bureau’s estimate of the current population of about 305 million people, each person would have to pay $2,300 to fund the $700,000,000,000. If each American (including children) paid a dollar a day, it would take more than six years to pay the money in full. One might argue, however, that this $700 billion would be a modest splash in the bucket of national debt, which already stands at well over $9 trillion (which means you already owe $31,642 each). Even the New York Yankees third baseman Alex Rodriguez would lose sleep over all those zeroes. Currently the top paid major league baseball player, Rodriguez takes home $28 million a year, meaning it would take 25,000 A-Rod salaries to carry the $700 billion. Nobody is rich enough to pay back this $700 billion by himself. In fact, the Forbes 400 richest list recently came out. It would take most of what these 400 people collectively have - a combined net worth of $1.57 trillion - to dig out of this mess.
It’s too much power for the government
Government is losing its creditability!!!
I work for a hedge fund - everybody here is waiting for bail out… I am not sure I support it.
I think most people agree that the bail out sucks, but is neccesary. I think its unfair that the burden will be put on tax payers, but a also think the same of medicaid and welfare spending. How much money have these banks paid into the system via corporate taxes and how many people do they employ. Also, many of the reps that voted against the bail out represent states that collect billions of dollars in farm subsidies which I also think is bs. Everyone has their opinion, but I think no matter how irresponsible executives at the banks were, they have paid enough into the system to get something back. I might also be a bit biased because I work at one of these companies. Interesting to see where the rest of our money is going… http://en.wikipedia.org/wiki/United_States_federal_budget,_2007
How about we compare it to what it really should be compared to. Outstanding RMBS WART, Prepayment rates, CPR and CDR, monthly cashflow and interest on the RMBS purchased to determine holding period Spread between purchased assets and finance costs GDP Tax revenue lost from declined GDP Debt incurred from keeping the same services without the same tax receipts Services lost due to alignment of tax revenues with expenditures Services gained due to the need for greater social programs to help out more people
Good point. How about they compare to the long term societal costs of reinforcing ongoing financial STUPIDITY?
virginCFAhooker Wrote: ------------------------------------------------------- > Good point. How about they compare to the long > term societal costs of reinforcing ongoing > financial STUPIDITY? How about the long term cost of a global fuckup because we’re too lazy and stupid to not allow the world to suffer for our stupidity? ME GRIMLOCK, ME SMASH GLOBAL ECONOMY BECAUSE ME TOO STUPID OR LAZY TO FIX!! SMASH SMASH SMASH!
I guess I can see both points from virginCFAhooker and spierce. A question I am asking myself is this. While some kind of measure seems necessary to avoid global economic termoil, is bailing out someone-wall st or US home owners-way to go? This time 700 bil (or less, more likely) might be max and we might be able to afford it, but party bailed out, knowing, or hoping, they will be bailed out next time around, too, will once again start taking unreasonable risk. So next time bail out cost might be 2 tril, then 5 tril, and so on and eventually nobody can afford to bail that out. Then, we are in so deep shit and I do not even want to think about what’s gonna happen. Now, what should be done at this point? Is there any other way? I do not have an answer.
For $700 billion, the U.S. could buy enough solar panels to provide 25% of our electricity supply. The money spent would increase employment in this vital sector and bring jobs to hard working americans. For $700 billion, the U.S. could buy enough nukes to provide 50% of our electricity supply. The money spent would increase employment in this vital sector and bring jobs to hard working americans. Or… For $700 billion, the U.S. could buy crappy mortgages supported by McMansions in Nevada…
For $700 billion, the U.S. could buy enough solar panels to provide 25% of our electricity supply. The money spent would increase employment in this vital sector and bring jobs to hard working americans. For $700 billion, the U.S. could buy enough nukes to provide 50% of our electricity supply. The money spent would increase employment in this vital sector and bring jobs to hard working americans. Or… For $700 billion, the U.S. can make sure they don’t cause a global depression and actually preserve some of the US’ wealth without spreading contagion. There, I fixed your post for you.
The damage was done when the appraiser said the Nevada McMansion was worth $1 million and the loan officer stamped the paper. All the stuff that’s going on now is just noise. You can shuffle the deck as much as you want… the joker is still in there!
For $700B we could fund up the AF Hedge fund really well. The money spent would increase employment in this vital sector and bring jobs to hard working americans (maybe even a few furreners).