Scuttlebutt

Above is Barry Ritholz’s way of visualizing the scale of the bail-out.
On the left, the bail-out. On the right, every previous major government plan, combined.

The bail-out is one of those things I shy away from thinking about, like remembering some gruesome auto accident.

I believe something needed to be done to aid the credit system after the collapse, but the bail-out was the wrong thing, and the amount spent defies all logic.

Read Barry Ritholz’s article on the bail-out. However, Barry estimates the cost of the bail-out at $15 trillion, but this NY Times article points out that $12.5 trillion are commited, but “only” $2.5 trillion are spent so far.

My way of thinking about the scale of the bail-out is that $1 trillion is $3,000 for every man, woman and child in the US. That’s right, if you have a family of 5, instead of the $2.5 trillion spent so far on the bail-out, the federal government could have given you $37,500. If they pay out the full $12.5 trillion, that figure would be $187,500.

Instead, they concentrated all that money in the hands of big banks, and what the banks did to “deserve” that money is to utterly mishandle the money they already had.

How will we ever pay this back?

This entry was posted on Thursday, June 18th, 2009 at 07:45 and is filed under politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.