- Long-term cost of the Iraq war: $3 trillion.
- Long-term cost of the government's bailout of the financial industry: $2 trillion. (today's figure is 1T, doubling that is probably being conservative).
- A president you can have a beer with: priceless
That's about 2 years total federal spending. Pissed down the toilet, and you and me are saddled with the bill, or about $25,000 for every adult in the US. Those numbers don't quite convey the enormous opportunity cost these liabilities represent. That is $5 trillion dollars not being spent on repairing infrastructure, fixing our health and education systems, funding alternative energy research, or even protecting us against terrorist threats.
Somebody somewhere pointed out that what we have now, clearly, is a system that could be described as "vacuum up" rather than trickle-down. Wealth is sucked out of the pockets of the working strat into the coffers of the extremely wealthy. Now the Wall Street types can go enjoy their bonuses while the ordinary taxpayer is on the hook for the downside of their fun and games.
If ever a situation called for angry mobs, this is it. Citizens should be stringing up the bankers and politicians from the lampposts. Not likey to happen in this spread-out and obese country.
Addendum: there must be a great disturbance in the force when people like Tyler Cowan are saying things like this:
You can blame lots of the crisis on government -- more than most people think -- but at the end of the day it is hard to escape the conclusion that markets simply have performed horribly in a number of important regards.Also, one of his commenters identifies an important point that I haven't seen elsewhere:
The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one timeThis is clever and nobody in the mainstream media has figured it out.
If you think the cost of this bill is $700 billion, you're wrong. The cost is actually infinite and the entire bill constitutes a giant money-laundering scheme.
Paulson can (and presumably will) buy up to $700 billion of these "assets", then sell them. Let's say he decides to buy them at 60 cents on the dollar and sell them for 10. You, the taxpayer, will eat the fifty cents, for an immediate cost of $350 billion dollars.
Having done so, he is then authorized to do so again, since the $700 billion is no longer on the government's balance sheet.
In fact, he can do this without limit, other than possibly due to the federal debt ceiling, which of course Congress will raise any time we get close to it. Oh yeah, this bill does that right up front too. No need to bother with it the first time around.
Folks, $700 billion isn't even close to the total cost of this monster.