While Secretary of State Hank Paulson pushes for the government to issue a $700 billion bailout, most of us in the media are still trying to comprehend just what that sum translates into.
For a better perspective on just how massive this bailout really is, check out Zephyr Teachout's post yesterday on techPresident:
It is $140 billion more than has been spent on the Iraq war since the invasion.
It is $120 billion more than that spent on social security benefits.
It is almost 3 billion nonrefundable bus fares from Durham to San Francisco, leaving tomorrow.
It is nine times the amount spent on education in 2007.
It could pay for 2,000 McDonalds apple pies for every single American.
That's a lot of pie. Here are some more numbers that we came up with to help you wrap your head around how much money $700 billion really is:
- It would reimburse banks, home owners, and local governments for nearly 9 million foreclosures
- It could prevent over 200 million foreclosures
- It could buy 8.6 billion monthly Metrocards
- The government could rebuild Katrina-ravished New Orleans and Gulf Coast … three and a half times
- Roughly 538 Yankee Stadiums could be built
- 5.4 million students could be sent to a public university
- It equals nearly 520 times the amount of Amtrak’s current operating budget
- It is $14 billion more than the U.S. spent during the Vietnam War
i want my bailout
worked all my life
am 67 live on 1100 a month or less
have to choose between meds and gro
owe about 3 k total
have 15 year old car
where do i apply for a free bailout money
suggest they use the 700bill to buy mexico and some
other mineral rich countries to pay lousy gs and others.
Your first sentence has an error. Paulson is the treasury secretary not the sec. of state.
give the money to the people about to go bankrupt, and reclaim the homes of those already evicted. Let them pay paper holders. That way we know that the money was properly used, not to just line the pockets of the Robber Barons of Wall Street, and the oily member of congress.
build a rocketship and send bush, cheney, rove, condi, powell, and the whole corrupt gang into space.
And where are those dirty bum heads of corporations that the House, Senate, and President have been floating favors to for the last 50 years (okay, century)? Those guys could probably sell off a few homes, cars, and vintage wines and bail the whole country out of this mess.
...Wait, I think I see them headed for the hills.
They aren't giving the banks 700 billion dollars. They are essentially buying assets from the banks. HUGE difference. If they buy them at a fair price, the taxpayer will make a profit from the deal.
From www.truthout.org : As the bailout is debated, few seem to have noticed the proposal item that puts taxpayers on the hook for future bailouts. It's in Section 6, and the key phrase is this: "The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time."
What does "at any one time" actually mean to economists? It means that if everything we American taxpayers buy re-evaluates down to zero, we get to buy more. That's hardly taxpayer "protection." With several hundred billion dollars of write-downs already announced this year by the part of the industry compelled to post their losses, it's a safe bet that $700 billion worth of the junkiest assets in existence will be heading to zero the second they are purchased.
to me this bailout doesn't sound like it is helpful to taxpayers...
The sky is not falling, ace. 700 billion is the estimated buyout price for ALL the outstanding mortgages. That means that for the bailout to actually cost 700 billion, every single one of the outstanding mortgages would need to fail. Most people agree that less than 20% of them are even "problematic," which means more like 100 billion. Not chump change, mind you, but still less than one sixth the cost of the Iraq war SO FAR (it's growing at a rate of 10 billion/month). Just a little perspective for you.
"You are missing the point" says those 700 billion are "buying assets", well then. Hold on -- aren't those "assets" that no one else wants to buy? Gee, I wonder why that is...
Joe says those 700 billion cover all those mortgages -- funny the treasury said "It's not based on any particular data point". In addition, this number limits the amount of holdings the treasury would be allowed to have at any one time, meaning a lot more toxic debt could actually be funneled through to reincarnate as actual cash in bankers' pockets, courtesy of the taxpayer and general dollar standing, over time. Now, if all's well as you guys seem to propose, why would Paulson demand absolute and unscrutinized power over those funds?
The truth is that Wall Street has deluded you into thinking they possess, produce and deserve ever more wealth, when in fact this wealth was a mere numerical fantasy that could be sustained as long as the music played. I say let the illusion unravel, see the emperor's clothes for what they are, and let those socioeconomic parasites find REAL JOBS that contribute more to society than the need to multiply shareholder value by any means possible, i.e. outsourcing, cutting of wages and so on.
If there is any potential gain out of all this, it maybe that Wall Street gets the long, overdue scrutiny it deserves. They need to start at zero and justify why they have to have a piece of all investment transactions.
I posted a (credited) quote from here to add to my own material at nmwoodworks.com/life . Lost in the sauce is that AIG does business in many other nations and they are not ponying up a dime.
A bailout is irrelevant and void until all banking practices are completely overhauled. As an Englishman I thank republicans for having the balls to say no, to say no to the status quo . Day zero is something our leaders are going to have to work for. It's quite remarkable that the silver lining is about to shine for world economics, call me optimistic but this is EXACTLY what the world needs right now, a financial catastrophe to remind people the importance of family and community. How about helping each other? it's remarkable our two governments can conjure up phenomenal amounts to "help" the financial markets, all around us there are countless better things to invest in such as SANITY
This is what happens when you have a republican for president. Those are some pretty impressive numbers though, and its ridiculous how much can be done with it.
Not that every american needs 2,000 apple pies.
So.....send every person in the U.S. a million dollars to pay off mortgages, buy surplus houses, etc......economy will be revived, we will only spend app. 4 million, and everybody's happy, yes?, and we save how many billions of dollars....
callie, don't start with the " it's all Bush's fault" thing. This started mainly with Carter and Clinton and the CRA. Making it illegal to deny someone credit because of their income is just plain stoo-pid!
It take 2 to negotiate a mortgage -- it's not just the banks here that are at fault but some blame has to be put on those individuals who really thought money was that cheap. Don't forget that 60% of the world don't even know that there is a crisis - some are existing (just) on $1 a day
this plan has some issues. first we should not just hand over money to the people that didn't want the government to regulate them, but as soon as they are in trouble they want the government to give them a hand out. why should they be the only ones to get help. what about all the small businesses that need help. are they going to get any of the money being handed out?
There is no plan that can get the US out . The money sought will only delay what is inevitable. A complete and total crash of the system.
But what I would like to know is, where has the money gone? Who has it? Because if it was all electronic and it was, then The US, Britain, Germany et al are going to sink and the developing countries who don't have that type of debt are the only survivors.
Look out here comes India, and China. Be warned your credit has to be paid for America.
Happy Christmas. The Baldchemist
Just a little post script. It will take at least 16 trillion dollars to get out of the mess your in. Check it out. It has nothing to do with mortgages. Foreign debt my friends, foreign debt.