Thursday, November 27, 2008

Big Bailouts, Bigger Bucks

The credit crisis bailout: the single most costly outlay in American history?

Eye-popping data and analysis from Barry Ritholtz, of The Big Picture Blog:
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 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
For some even more dazzling comparison and analysis, be sure to read Ritholtz's full article here.

We hope this startling information doesn't spoil our gentle readers' appetites, as they get ready for today's Thanksgiving holiday feasts. Be sure to have an extra helping or two of gravy today. It seems everyone in the financial sector is already doing that. Gluttony indeed seems to be highly fashionable this holiday season.

Update 11/27/08 8:45 a.m. MT: In an article update a few minutes ago, Mr. Ritholtz makes note that his above $4.6165 trillion dollar figure might be a mite on the low side:
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. (Data breakdown is here)
Our thanks this Thanksgiving Day to Mr.
Ritholtz, for compiling and sharing this sobering information.

1 comment:

danny said...

Rudi,

The numbers your cite are interesting, but unrelated.

For a more accurate comparison, note the cost to the country to bail out and prop up the aristocracy of the Roman Empire in its fading decades.

Of course, it took them many centuries to reach the level of corruption and removal from reality that we have reached in only two centuries.

This is only the beginning. 1% of us own almost everything, and run almost everything. And how are we trying to "revive the economy"? By getting the commoners to BORROW more money to spend in the shops owned mainly by the rich (the others don't own the shops but owe mortgages to the rich on them) and paid back with commoners' toil with interest of course.

Welcome to the United Fiefdom of America. Now get out borrowing and spending, you sharecroppers.

And yes, Curm, if only I would "get out more and talk to people," then I would naturally think like you do. What a persuasive, well-reasoned rebuttal that was, my bro.

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