Posted on 11/26/2008 4:36:16 AM PST by Westlander
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.
(Excerpt) Read more at ritholtz.com ...
Let's conceptualize these numbers: With 100 million households in the country, this is $46,000 per household. This money comes primarily from those who are most productive, since they are the ones with the income to eventually pay back the bailout money with their tax dollars. This money goes primarily to those who are least responsible, since they are the ones who took out loans they could not afford to repay, loaned money for mortgages without checking whether the borrowers were creditworthy, and ran their companies based on a fantasy rather than based on facts. This bailout is $46,000 per family, or in truth far more from each taxpaying family, that is completely and totally wasted. This money will not solve any of the financial and business problems that need to be dealt with; our $46,000 per family simply delays the solutions of those problems and prolongs the "crisis".
More pie!
Mathdoc, you need to rework your numbers based on fact that 46 percent of workers do not pay any taxes.
So that means each taxpaying household is on the hook for $92,000.00.
ping
It was last year at a diversity journalists conference that Obama said he thought reparations could be accomplished through mainstream programs.
That's almost real money. But if it keeps families in their homes (that they can't afford and should have known they couldn't afford), if it saves jobs at major corporations (that are producing inferior products and doing it at a higher price than their competitors), and if it increases economic stability (maintaining the problems rather than using this "crisis" as an opportunity to correct the structural problems), then our $92,000 per taxpaying family is worth the cost ... at least in the eyes of the deadbeats who vote for spreading our wealth around into their pockets.
Simple expression of the moral hazard of Government Investment, it is the economic equivalent to a negative ROI investment. IOWs subsidizes more failure by penalizing good performance. It is true with every thing the Government ‘invests’ in, look at education, energy, welfare and so forth.
Everything I read indicates that the treasury is BORROWING this massive amount of money to “spread the wealth” around. I am no economist but I do know that borrowing means someone (i.e., taxpayers) will have to pay interest on this debt. It appears that we are stumbling toward another HUGE crisis when we realize that the cash flow to service this debt (even at artificially low interest rates) will be so big that the cash flow for that will overwhelm our revenue stream and there will be no money for anything else, like defense and social security and Medicare. Reneging on the debt will be de facto bankruptcy and will probably cause a total economic collapse. Printing money to pay off this amount will cause hyperinflation. We are in a dilemma of biblical proportions and we have just elected a president who has no record of performance for dealing with crisis’s of even minor proportions. Sooner or later we are going to have to face reality and let the economic system find a (painful) level of equilibrium.
As long as I get MY piece!!!
You have put into a single post what that nitwit Treasury Sec., Bush, and everyone who supported the bailout can't seem to figure out!
Prices ARE going to drop, it is only a question of when and how much more damage is going to be done before they do.
And prices dropping is a GOOD thing!
In a perverted way it is our worst enemies (North Korea, others) who tested the water -- who did the proof of concept -- with our currency in this matter. It was their massive counterfeiting that showed that huge amounts of cash could be added with little evident inflationary effect.
And like all apt students in a bind on a test, taking just one answer from the smart kid across the aisle is difficult, take one, and then a cheater will take ten. It seems our cohort of apt students can't even stop at ten, they are rapidly moving to the hundreds and beyond.
And the current business stall seems deflationary, so that running the copy machines overtime seems like it ain't causing inflation right now, and pervertedly seems like it is just the right thing to do right now.
But it is not. And it is sad. A mega tsunami.
well put!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.