Remember all the talks earlier in the year about a second economic stimulus package? At the time I thought it was all just political talking, what with an election coming up. Nope. Here it is but this time it’s in the form of a $700 billion bailout to be used to buy mortgage backed securities.
No, you and I won’t get a check this time. The money is supposed to help keep the financial markets “liquid” and keep the mortgage backed securities markets moving.
MainStreet.com shows us an idea of what $700 billion could represent:
- Is equal to about $2,300 for every man, woman and child in the United States of America. (Are you a family of four? “That’s $9,200, please.”)
- Is worth more than 100 billion movie tickets.
- It would take 1,353 sequels to The Dark Knight, if each matched the $517,000,000 domestic gross of the film to date.
- Is $266 billion more than the combined wealth of the top 20 richest Americans.
- Is 46 times the state of California’s budget deficit.
- Is $178 billion more than what the Iraq War has cost so far.
- Is $218 billion more than the 2008 Defense Spending budget.
- Is more than 12 times the 2008 Budget for Education.
- Is the total of 3.5 million home mortgages worth $200,000.
If the government must give this money out I think I’d rather have a check for $9,200 for my family instead! (Though I could go see The Dark Knight an awful lot!).
Here are some things I wonder:
- How many schools would this build or repair?
- How many schoolbooks could this buy?
- How many roads could this repair?
- How many homeless could this help?
- How many meals could this provide?
- How many third-world countries could be given clean water?
- How much health care could that cover?
- How many teacher, police, firemen, est…could be given better salaries?
Some other thoughts on the $700 billion bailout proposal:
Running Numbers On Treasury Bailout Plan
Dear Government, So Let Me Get This Straight…
The Mortgage Meltdown Signs Were There All Along
$700 Billion Government Bailout Could Really Be $839 Billion
What Caused The Financial Crisis Of 2008?
What do you think about all of this? Is the government doing the right thing in trying to pass this bailout?
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That’s a cool way to put things in perspective for sure. Also $700 billion is about the size of three Microsoft, or 5% of our GDP.
Thank you for including my article!
Very interesting facts there. I must say, on the surface I’m not a fan of the bail out. But I’m not an economist and it may turn out that this is the right thing to do – but only if they add some regulations to go along with it. Otherwise our country will go straight back to it’s free spending ways of mass consumption, which is what caused this mess in the first place.
@ Pinyo – 3 Microsofts, scary!
@ Patrick – This might be the right thing to do, we saw what happened with WaMu, but there does need to be some regulation and oversight. I don’t like the idea of one person having the absolute say on who gets money.
Perhaps loans, like for AIG. That way their precious liquidity is restored, and there is actually the chance that the government gets the money back plus interest. Just buying the bad assets is a bad idea. Because who would buy them from the government?
It’s more than we spend on public education and we still won’t know if $700 billion is enough to shore up the financial markets.
This is a joke, it’s completely ridiculous.
Instead of investing this money in the nation we’re going to throw it at a group of individuals that are partially responsible for the current state of the economy? Bad move, in my opinion.
But then again, we all don’t really have much of a say anymore. Now that the people who are getting that money are the same people who run the country.
*It’s our faults for investing in them, is it not? Stop taking out unnecessary loans people!
@ Miranda – Hopefully all of the assets aren’t bad. I think the problem is they can’t put a solid value on them. And that makes all of this even scarier!
@ Scott – Maybe of we spent more on spending we wouldn’t be in this situation. I’m thinking more personal finance education, like what a mortgage is and how credit cards work.
@ Tanner – Agreed. As much as we might want to blame the Wall St types it’s not all their fault. People took out bad loans. Imagine of we could really invest in ourselves though?
To think these Wall street “fat-cats” are responsible for this.
They are so stupid they can’t keep count and go in debt from purchasing assets that bring them insufficient profit.
And what does the government do?
Do they make them pay it out of their pockets?
No.
They put it on American tax payers. Not only will we have to pay for it, but our children will be paying these debts off as well.
I say we strip ‘em for all they got, and treat them like someone who’s $50,000 in debt; make them pay it off — not matter how long it takes.
It’s their fault, and we suffer?
But then the economist who came up with the $700 billion number are idiots as well.
It was stated by them, and I’m paraphrasing, that the number isn’t really accurate, they aren’t sure exactly how much is needed to fix things, but they figured $700 billion should be more than enough.
I thought there was a science behind this?
They literally just picked a big number and said, “that should be enough”.
I’m sick to my stomach. If McCain wins, I’m moving to Great Britain.
“If McCain wins, I’m moving to Great Britain.”
Wow. He’s the guy actually standing up to this pork-filled high-dollar farce…
I’ve been thinking about this bailout, and the Democrats have made a brilliant move to force the Republicans to look like fools NO MATTER WHAT THEY CHOOSE TO DO.
First, McCain saw this coming…he said so, what, three years ago? He even named names like Freddie Mac and Fannie Mae.
He decided to put solving this crisis before his own campaign, opting to do whatever was necessary to help the US.
The Dems can pass this bill without the Reps, but instead opt to ‘put the ball in their court’ so they can either deny the bill that THEY KNEW would get shot down by the Reps, thereby passing the urgent Friday deadline, so if something goes wrong they can blame the Reps for stalling.
They blamed McCain for messing up the meeting when he didn’t really say much at all during the meeting.
This is all political spin, and if anyone can’t see it they are either blind or stupid.
I’ve gone into a tad more detail on Verbal Thermite. But this disturbs me.
Sounds to me like rather than doing like Obama (trying to pass a $700 billion dollar bill with %20 earmarked for questionable groups like Acorn), McCain is actually trying to be honorable and fight for something that will hurt the taxpayer less.
Either way, pass or fail, this should not be happening at all. We should have checked these companies closer, and they shouldn’t have been greedy. Perhaps we can prevent this in the future, but not without some serious thought and effective decision-making.
“Wow. He’s the guy actually standing up to this pork-filled high-dollar farce…”
I wonder from under what rock you get your resources from . . .
For the record, they both stated during their most recent debate that neither of them can state where they stand on the $700 billion bailout, since it hasn’t even been put in writing yet.
But judging from McCain’s character and past behavior, I feel he will favor it.
Do I have to point out how many times McCain has lied about the policies he supports? And how many times he has contradicted himself?
And how he says he supports one thing on t.v., but if you go to his site you’ll see that he actually doesn’t?
@ Wess and Luis – Indeed there is a political element to this. It’s scary that the $700 billion is more of a shot in the dark number too. But from what I’m hearing if the liquidity problem isn’t corrected soon it will trickle down to all sorts of businesses that need loans. We got into this problem due to lack of understanding, greed, and not enough oversight. We need to figure out the best way out and make sure this doesn’t happen again. It seems that the taxpayer will take a hit as a result of all of this. It’s a shame that it’s come to this.
I think I know who I’m voting for and I hope he can help lead us out of this mess. But I think whoever wins will have a tough couple of first years too!
The Federal Reserve is what allows the government to create such a huge mess. No one would allow this if they were taking it directly our of our pockets from taxes, but as they take it indirectly from inflation, no one notices.
@ Chris – I think a big problem is that most people don’t realize what it means when the gov’t pays for something. The money doesn’t come out of now where! The money has to come from revenue or borrowing which means either taxes or debt!
FFB – Although you are partially correct about how the government pays for things, but I have to agree with Chris.
The facts are out there. The Federal Reserve is the root problem for all of this. And, yes, the Federal Reserve does pump money “out of the air” into the economy. That is inflation and why we are where we are.
The Federal Reserve is a private bank — not a government agency. They loan the U.S. its currency at interest. Every dollar in circulation is owed to them — and some.
The Revolutionary war in the late 1700’s happened because the King of England was forcing the colonies to borrow the country’s currency from the Central bank of England at interest.
Our forefathers were well aware of this. And it’s believed to be one of the main reasons the Revolutionary war happened. They knew that borrowing the country’s currency from a Central bank could only mean one thing — slavery.
We won and several Central banks were closed, but then the Rockefeller’s, the Morgan’s, the Rothchild’s and “chronies” somehow got the one we know of today to open in 1913 — well not somehow, they had congress in their pockets.
Years later, the great depression set off, along with a number of other mishaps thanks to those assholes — pardon my french.
I suggest you do some critical thinking and not just feed into the BS you are taught in school.
There is evidence of this all over the place. Before 1933 all “paper” money was redeemable in gold from your local bank. Now every dollar bill you look at says, “This note is Legal tender. For all debts public and private”
In other words it has no value, it’s just paper. The only reason it seems to have any worth, is the amount of money pumped into the economy — “out of thin air”.
Remember the great Gold seizure in the 1930’s, where everyone was forced to turn in all their gold or face imprisonment of up to 10 years?
They literally robbed the U.S. citizens of their wealth and threatened to throw them in jail if they didn’t comply. And all this was supposedly done to, “get us out of the great depression”.
This $700 billion bail out is the modern way of doing what they did then.
They said we needed a Central bank because if the country produced its own currency they would cause inflation . . . Well . . . isn’t that what’s going on now?
I may be young, but I know the entire history of this country inside and out.
I also know FEDERAL income tax is unconstitutional and is NOT apportioned to ANYTHING whatsoever. There is no record of where the federal income tax we all pay goes to.
Why does the government make Americans pay it then?
Because where else are they going to pay off the interest they owe the Central banks?
Yet 90% of Americans are clueless of such knowledge — they’re too busy watching t.v.
By the way I’m American
Don’t believe any of this? Look it up.
I believe the central bank was created long before the 20th century. Hamilton could probably be credited for that (don’t have time now to check wikipedia).
As for Federal income tax, there was an amendment made to make that possible.
And still, there is no money made out of nowhere. Thought we could print more money to pay debts it isn’t the policy since that would cause hyper-inflation. What the Fed does is make money either more available or less available due to the Fed funds rate. The low rates we’ve seen in the past years are a big part of this economic mess. Low rates made lending cheap and made more money available to businesses and people.The low rates made it possible for so many to get mortgages or re-finance homes.
The information from MainStreet.com really is an understandable way to comprehend what 700 billion dollars “looks” like! Simply staggering!
what a joke $700 billion to bailout it would cost less for the government give familys 1 million that would be only 300billion the government got no clue what to do and as for government we dont work for them thay work for us
Looking back I think that we should have taken the troubled assets (big three) and figured out the actual value of the assets and figure out a way to either liquidate them for profit or leverage them to stimulate the economy, changing the US automotive industry, rather than allowing them to remain in control, when they obviously aren’t. IMHO
Im just saying it isn’t fair to the taxpayers.
“I think a big problem is that most people don’t realize what it means when the gov’t pays for something. The money doesn’t come out of now where! The money has to come from revenue or borrowing which means either taxes or debt!”
Gee, I remember me saying our Government can, does and will create money out of thin air.
I remember the owner of this site explaining to others who had my views how money has to come from somewhere I.e., taxes!, as if we didn’t know any better – and I agree to a certain extent.
But wait, look, oh no! The fed just printed 1 trillion dollars out of thin yesterday!
Tsk, tsk, tsk.
Just like I predicted.
Thought you knew your country, huh?
@ Luis – So you can say for sure that what the Fed did was increase the money supply by a trillion dollars? I haven’t seen the details of the recent deals but odds are that money gets funded via taxes or borrowing. Not that it’s a great option either. The idea that we will be owing more to foreign countries that hold our debt doesn’t please me.
I’d love to see the details if you have an article showing it (been behind on my RSS).
Yes, I’m saying that.
And sure, I can do better than an article; here’s the actual news clipping on Fox News:
http://www.youtube.com/watch?v=FnZ8p3ESod0
I remember you posting a link to show what $700 billion looks like.
In this video, you’ll see what $1 trillion looks like, and will also see it was from thin air, and how it’s a long-shot our Government is trying to pull off in an effort to jump-start our Economy.