I’ve seen differing reports on the total cost of the bailout package for the banking system in the United States. The total amounts are reported between 3.5 and 5 Trillion dollars, even worse, a lot of the cost is hidden and undocumented in things like poorly documented tax law changes to support acquisitions. There is no transparency, no oversight, and even worse no accountability.
To put this monstrous amount of money in perspective, consider the following:
- Universal Health care is estimated to cost 110 Billion per year, the bailout would’ve paid for health care for 45 years.
- The US trade deficit with China is 500 Billion.
- Revenue for the US government in 2007 was 2.5 Trillion Dollars. This is the revenue collected in income taxes (both personal and corporate), user fee’s, gas taxes, federal tolls on roads, everything. The amount spent on the bailout would’ve given US Citizens and businesses a 2 year tax holiday – now THAT is a stimulus package.
Right now there is a lot of rationalization going on in Washington, they honestly expect to make most of this money back as loans are repaid (with interest), or the equity stakes are sold.
The question is will history mark this as a positive action or a negative action? I sincerely hope for the worlds sake that this move works out, but the amounts of money involved are truly scary.