#followme { top: -32px; } a.dock-item { position: relative; float: left; margin-right: 10px; } .dock-item span { display: block; }
Skip to main content

True Cost of Bailout

Submitted by charliehiphop on Mon, 2008-09-29 08:04

[Update: Now it seems that the bailouts (TARP and others) might cost anywhere from $2 trillion to $5 trillion, as if $700 billion weren't obscene enough. When can we just admit that we're bankrupt?]

new yankee stadium

$700 billion-plus of your money is going to Wall Street to bail out the derivatives traders.  Hooray.  I feel safer already.)

TARP applied a big Band-Aid to a wound that requires aggressive surgery was applied today. First of all, the U.S. government can't raise or print that much money, but who cares? The effect on the Treasuries market will be devastating [Update 1-5-2009: Dump 'em if ya' got 'em... you've been warned] Who's going to buy $700 billion (OK, it's "only" $250 billion up-front) more of increasingly shaky looking U.S. debt? Second, even if the market is able to absorb that many newly borrowed dollars, the effect will be to diminish the strength of the dollar significantly. Third, think of all the other things that money used to buy.

$700 Billion Used to Buy:

  • 437.5 new Yankee Stadiums
  • 230 Freedom Towers
  • 2,800,000 $250,000 houses
  • 7,000 absolutely state-of-the-art high schools
  • 1,758 Bridges to Nowhere (Wow, that was one expensive bridge!)
  • 46,000 Brooklyn Bridges (not adjusted for inflation)
  • 13 months of all U.S. military operations, including the wars in Iraq and Afghanistan
  • 14 months of all Social Security expenses
  • $1,000 monthly rent for one year for 58,333,333 apartments. (Yeah, that's right -- triple-checked.)
  • One year of Cadillac health coverage for 100 million people

freedom tower

You get my point: It's a damn lot of money. Well, it used to be a lot of money. This money comes on top of the $165 billion "economic stimulus" package earlier this year and the $85 billion AIG bailout and the $20 billion guarantee for the Bear Stearns deal and...

eaah

, what's a few billion here and a few billion there among friends, right?

Seriously, though: Dumping this much money into the markets cheapened money itself. The Freedom Tower might never be built because it just got a lot more expensive. Maybe that now-embarrassing hole in downtown Manhattan will serve as a reminder to the Wall Street people to be more careful when they're gambling with other people's money.

Here's some perspective on a billion as a number.

Share this

Comments

#1 looks like i jumped the gun

Submitted by charliehiphop on Mon, 2008-09-29 15:26.

the house shot it down. wow. now what? the banks fail? money flow freezes up?

or do we get a better deal out of it?

if the taxpayers bail these buzzards out, the taxpayers owns them lock, stock, and barrel or no deal.

#2 CBS Early Show...

Submitted by charliehiphop on Fri, 2008-10-03 08:36.

... did a piece on this today. It was a decent segment, but they got their Yankee Stadium number wrong -- they said it was 500-something, but it's down to 437.5 now with the cost overruns.

It's amazing how often you'll see something on a blog, then see the same darn thing on the teevee a few days or weeks later. As long as we're leading, folks, that's all that matters. Far more people read blogs than watch the teevee news.