The bailout in perspective

jimpeel

Well-Known Member
Some numbers, for those who need them, as to just how large the bailout has gotten; and what we did that had Earth shaking results spending far, far less.

All of the programs and events listed are half the cost of this debacle. Here we ara with all of this money being spent and they tell us that we are no better off than before it was spent. The same guys who got us into the mess are the ones who are supposed to get us out of it? Meet the old boss, same as the old boss.

http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/

Big Bailouts, Bigger Bucks

Posted By Barry Ritholtz On November 25, 2008 @ 7:19 am In Bailouts, Markets, Taxes and Policy

Whenever I discussed the current bailout situation with people, I find they have a hard time comprehending the actual numbers involved. That became a problem while doing the research for the [1] Bailout Nation book. I needed some way to put this into proper historical perspective.

If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. People have a hard time conceptualizing very large numbers, so let’s give this some context. The current Credit Crisis bailout is now the largest outlay In American history.

Jim Bianco of Bianco Research crunched the inflation adjusted numbers. The bailout has cost more than all of these big budget government expenditures – combined:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

______________________________________________________________________

data courtesy of Bianco Research

>

That is $686 billion less than the cost of the credit crisis thus far.

The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion

The $4.6165 trillion dollars committed so far is about a trillion dollars ($979 billion dollars) greater than the entire cost of World War II borne by the United States: $3.6 trillion, adjusted for inflation (original cost was $288 billion).

Go figure: WWII was a relative bargain.

I estimate that by the time we get through 2010, the final bill may scale up to as much as $10 trillion dollars…

>

UPDATE: November 25, 23008 10:34am

A few additional details:

-Well regarded Jim Bianco did the number crunching. The easiest method is to recalculate the numbers using CPI data. There are other ways to depict this — such as percentage of GDP, or on a per capita basis, or in terms of costs of common items (eggs, bread, big macs, etc.).

[2] Bloomberg calculates the total amount the taxpayer is on the hook for is $7.76 trillion, or $24,000 for every man woman and child in the country. ([3] Data breakdown is here)

Regardless, no matter you calculate it, we are talking about an ungodly amount of money.

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/

URLs in this post:
[1] Bailout Nation book: http://www.amazon.com/exec/obidos/ASIN/0071609059/thebigpictu09-20
[2] Bloomberg: http://www.bloomberg.com/apps/news?pid=20601109&sid=an3k2rZMNgDw&
[3] Data breakdown is here: http://www.bloomberg.com/apps/data?pid=avimage&iid=i0YrUuvkygWs
 

Gonz

molṑn labé
Staff member
I heard another analogy that worls well....

One million seconds ago, it was two weeks ago. (roughly)

One billion seconds ago, it was 1974.

One trillion seconds ago, it was 28000BC.

Now, multiply that by 7.
 

chcr

Too cute for words
When Joe said it would....in about may to july somewhere.

I think it already has, we just won't notice for a while. Do you think the founding fathers could point to an incident while it was happening and say, "This is the start of a revolution." I think that rather they started trying to address circumstances that they found intolerable and only realized that it was revolution later on.
 

Gato_Solo

Out-freaking-standing OTC member
Interesting. I, too, have a perspective...


$700,000,000,000/306,000,000=<>229,000

I don't know about you, but $229,000 is more than enough money to pay off a house, or get out of a mortgage problem for most US citizens.

BTW...I don't advocate giving anyone one red cent, but put that into your perspective.
 

JTP

New Member
I think it already has, we just won't notice for a while. Do you think the founding fathers could point to an incident while it was happening and say, "This is the start of a revolution." I think that rather they started trying to address circumstances that they found intolerable and only realized that it was revolution later on.


"When Benjamin Franklin returned to America in 1762, after almost five years in London, he was shocked at the housing prices.
“The expence of living is greatly advanc’d in my absence,” he commented. “Rent of old houses, and value of lands ... are trebled in the past six years.”

Franklin, it seems, had come home to a real estate bubble. It eventually popped — bringing on a credit crunch and deep recession that was the macroeconomic backdrop to the American Revolution.

Sound familiar?

The parallels between the current economy and the one Franklin saw highlight a debate among historians: how big a role did economics, as opposed to ideas, play in fomenting revolution?"

-Tim Arango in today's NYT
 

jimpeel

Well-Known Member
You do the math...on your own calc...and tell me what it comes out to. I used the calc in XP.

$700,000,000,000 / 306,000,000 = $2,287.5816993464052287581699346405

... approximately :evileek:

Now, if we take the updated figure of $7.76 trillion it becomes:

$7,760,000,000,000 / 306,000,000 = $25,359.477124183006535947712418301

... approximately :evileek:
 

2minkey

bootlicker
You do the math...on your own calc...and tell me what it comes out to. I used the calc in XP.

the fact that you didn't simply eyeball it and say to yourself "this number dudn't look right" frightens me. i didn't need no calculatrix to tell me that something was askew... how sad and dependent amerika has become. :cocktail:
 

catocom

Well-Known Member
my guess only about 100mil on Adult people number though, so...
we can play with the numbers all day, but it's still way toooo much money.
 

Gato_Solo

Out-freaking-standing OTC member
the fact that you didn't simply eyeball it and say to yourself "this number dudn't look right" frightens me. i didn't need no calculatrix to tell me that something was askew... how sad and dependent amerika has become. :cocktail:

I posted that on the fly and trusted Microsoft. Sue me. :p
 
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