$700 billion dollar bailout Posted by mitcka at 09/24/08 04:01 PM

Treasury Secretary Paulson says this bailout is the only way to prevent real economic harm to our nation. But this is a lot of money. How much? Here are some other things that cost $700 billion.

The Defense Department last year asked for a 2008 budget of $481.4 billion to support operations around the world and in cyberspace. So the bailout will cost taxpayers more than our national defense budget for this year.

Now, to be fair to the DOD, that budget doesn't include all our spending on Iraq and Afghanistan. The total cost of the war in Iraq was estimated at $500 billion back in January by Bush's former economic advisor Lawrence Lindsey.

The Washington Post estimated the entire 2008 federal deficit at nearly $500 billion on September 10th, before this announcement. Does this mean we are about to "double down"?

We spent $500 billion in 2005 to treat the ten most expensive medical conditions, according to a widely cited update by the Agency for Healthcare Research and Quality.

Here's an eye opener: $700 billion is twice what we spent on foreign oil in 2007. The U.S. imported 4.3 billion barrels of oil at an average price of $72 per barrel, totaling $352 billion.

Congress adjourns this week, and this is a weighty decision to make in just a few short days. This bailout may be the best thing for Wall Street, but will it be good for you and your neighborhood?

A lot depends on what happens should a bailout get approved. Here's the statement we put out this morning describing what any bailout agreement should include to give us a fighting chance to help taxpayers, homeowners and consumers in the future.

What do you think?

comments (8)

1 Posted by Paul at 09/24/08 09:29 AM

We should oppose this bailout. Why can't we forgive the mortgages people have. That would be a real economic stimulus package! Instead we are going to dole out money to millionaires because they screwed up.

2 Posted by George Kopczynski at 09/24/08 09:31 AM

What about Section 8 of the proposed legislation? Scary, isn't it?? More of Bush's shenanigans!

3 Posted by David Kozlowski at 09/24/08 09:34 AM

Any money given to Wall Street should be in the form of a loan to be paid back with interest and paid back before companies issue dividends and bonuses.

4 Posted by Tom St.Martin at 09/24/08 09:37 AM

There is a letter to the editor in the Minneapolis Star Tribune today, 9-24-2008, from an attorney who was involved in resolving a crisis in the 1980s when farm land values declined severly. He gives step by step procedures that use existing bankruptcy law to resolve this current crisis without giving away the store. I have passed this information on to my Senator, because what he wrote makes a lot of sense to me.

5 Posted by Avi Olifant at 09/24/08 09:38 AM

Since this is an economy based on caiptalism I think that these companies need to handle this themselves. The taxpayer should not be punished fo something that he hasn't done. Paulson was the CEO of one of the surviving banks. I believe that what he wants done is to prtect his former company.

6 Posted by zzx375 at 09/24/08 09:38 AM

There is an immediate cost here, as well as long term one.

The long term cost will be for the oversight function. This needs to be recognized. The degree of oversight and length of time are different discussions.

I can agree that executive compensation has become an elephant in the living room but government regulation concerns me.

I understand that lender who benefits from a bailout should not then put the screws on a borrow who is having mortgage issues and at a high level I can agree with that.

But much of what we are collectively reaping here is a "Get the credit you deserve!!" mentality. Pull the variable rate mortgage option out of the market place. Period. That will prevent many folks from owning a home, but it will also prevent those who start out shakey from going under when the interest starts to float.

Don't own a credit card. Period. Cut them up. Pay cash. If you want the big screen TV and don't have the cash, do without. Learn contentment.

Governement warrants to own a share in a company need to have an end of life so that government ownership ends. Governments should not own a piece of any company. That is bad public policy.

If a loan or business deal looks to good to be true, if that rate to borrow is 5% below market or if that "guaranteed" interest is 5% above market, then it is too good to be true. You will reap what you sow.

7 Posted by Gilbert at 09/24/08 09:43 AM

Congress should not be signing a blank check in our name! Didn't Sweden go through a very similar economic near meltdown in 1992? Didn't they solve it by requiring that their financial institutions conform to regulations and pay off their debts to their citizens? Aren't we as good/smart as the swedes?

8 Posted by JD Adams at 09/24/08 09:44 AM

Wall Street, large corporations, CEO's with golden parachutes.... these companies like AIG should simply be allowed to die the death deserved, and the assets sold off. Bailing out banks, insurance insutries, corporations and businesses.... people who have all gotten rich essentially through greed, are not deserving of bailouts from the taxpayer. As a taxpayer who has no golden parachute and six figure income guarantee, why should I be expected to bail anyone out. Bail me out. My small business is going under from the financial stress on the economy. My house is worth what it was in 2003, with property values destroyed. Bail me out. bail out middle America. Support the FAIRTAX Plan!