It is not really hundreds of billions in spending, it is hundred of billions in investing. The government will pick up most of these loans at about 60 cents on the dollar. As long as the real estate market does not crash, the US government will likely make out making billions on this deal. Of course the government will get stuck with more than its share of bad loans, it should make out well on the majority of them.
Two cheers for pessimism!
From Michael Oakeshott’s essay “On Being Conservative”:
“Politics is an activity unsuited to the young, not on account of their vices but on account of what I at least consider to be their virtues....Everybody’s young days are a dream, a delightful insanity, a sweet solipsism. Nothing in them has fixed shape, nothing a fixed price; everything is a possibility, and we live happily on credit. There are no obligations to be observed; there are no accounts to be kept....Some unfortunate people, like Pitt (laughably called ‘the Younger’), are born old, and are eligible to engage in politics almost in their cradles; others, perhaps more fortunate, belie the saying that one is young only once, they never grow up. But these are exceptions. For most there is what Conrad called the ‘shadow line’ which, when we pass it, discloses a solid world of things, each with its fixed shape, each with its own point of balance, each with its price; a world of fact, not poetic image, in which what we have spent on one thing we cannot spend on another; a world inhabited by others besides ourselves who cannot be reduced to mere reflections of our own emotions. And coming to be at home in this commonplace world qualifies us (as no knowledge of ‘political science’ can ever qualify us), if we are so inclined and have nothing better to think about, to engage in what the man of conservative disposition understands to be political activity.”