Big numbers, Crazy ideas

Written By: - Date published: 1:11 pm, May 13th, 2009 - 6 comments
Categories: economy - Tags:

Most of us work for a living, and worry about money measured in tens, hundreds, or thousands of dollars. For myself, I find the numbers involved in the economic crash and the bailouts to be so insanely huge as to be meaningless. This article summarises some of the numbers involved in America, and actually manages to give some sense of their scale as well:

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. …

Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed.

‘We’ve seen money go out the back door of this government unlike any time in the history of our country,’ Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. ‘Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?’

The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year … The worst financial crisis in two generations has erased $14.5 trillion, or 33 percent, of the value of the world’s companies since Sept. 15; brought down Bear Stearns Cos. and Lehman Brothers Holdings Inc.; and led to the takeover of Merrill Lynch & Co. by Bank of America Corp.

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.

Even more disturbing than the amounts involved is the secrecy with which this all being done, and the way the “bailout” serves only the interests of the very bankers who created this mess. Wouldn’t it have been more effective to direct that aid to homeowners and businesses in the real economy? Which leads on to a second article from the same site, with an idea for America that is obviously so crazy it could never work. I mean – it really could never work – of course it couldn’t. Could it?

Dear Mr. President,

Please find below my suggestion for fixing America’s economy. Instead of giving billions of dollars to companies that will squander the money on lavish parties and unearned bonuses, use the following plan. You can call it the Patriotic Retirement Plan:

There are about 40 million people over 50 in the work force.

Pay them $1 million apiece severance for early retirement with the following stipulations:
1) They MUST retire. Forty million job openings – Unemployment fixed.
2) They MUST buy a new American CAR. Forty million cars ordered – Auto Industry fixed..
3) They MUST either buy a house or pay off their mortgage – Housing Crisis fixed.

It can’t get any easier than that! …

6 comments on “Big numbers, Crazy ideas”

  1. cocamc 1

    well it could not work cause 40million x 1million is 40 trillion. Thats a lot of dough!!!
    This letter has already been analysed before . the 9.7 trillion is a lot less but still astornomical figures

  2. MikeE 2

    How about something easier…

    A 9.7 Trillion Dollar tax cut.

  3. Quoth the Raven 3

    It’s good to see some criticism of the Obama administration. Far too many people seem to see him as the second coming of Jesus Christ and it’s sickening.
    Another recent thing was his continuation of the presidential proclamation of the National Prayer Day something that the likes of Thomas Jefferson opposed on the grounds of separation of church and state and the American constitution. Now what was all that I heard about Obama and the constitution?

  4. Maynard J 4

    Tax cuts are too blunt and ineffective. Bit more finesse called for.

    However I think the $40 million idea is a joke. People over 50 have nothing to add to the workforce any more? I suppose it could be optional but you would lose a lot of experience.

  5. aj 5

    In the 2nd suggestion, shades of Gareth Morgan {and myself}
    Why give capital to the banks directly. Work out a method of giving to borrowers, who have to repay debt. Banks get their money, goes someway to reducing debt/increasing equity in homes, frees money from payments for spending within the economy

    • Draco T Bastard 5.1

      Even easier – forgive all debt. A few people lose money (~0.1% of the worlds pop.), everyone else is better off.

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