Whenever there is discussion of the current financial situation in the US and the rest of the world, it's obvious to me that people are having a hard time comprehending the actual numbers involved -- especially regarding the "bailout" of the current credit crisis. I had a lot of trouble, too, so I took it upon myself to get better educated, and would like to share what I've learned so that others might gain some new ways to put it all into perspective, as well. Hang on - it may terrify!
What I've done is compiled and edited various perspectives and analogies sprinkled throughout the comments section at this source, added my own thoughts along with some serious questions I've posed near the end -- and wound up on a note of Thanksgiving appropriate for this day.
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First of all, if we add in the new Citi bailout announced this week, the total cost now exceeds $4.6165 trillion dollars. (Note this Bloomberg article here.)
Since people have a hard time conceptualizing very large numbers, let’s give this some context: The current "Credit Crisis Bailout" is now the largest outlay in all of American history. Jim Bianco, of Bianco Research, crunched the "inflation adjusted" numbers. This bailout is now going to cost more than all of the following big budget US government expenditures in history – 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 billionTOTAL: $3.92 trillion
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Well, folks, the ugly truth is that combined total is $686 billion LESS than the "official" cost of this current credit crisis, unfolding over just the past few months!
The only single American event in history that even comes close to matching the cost of the credit crisis is World War II -- Original Cost: $288 billion; Inflation-adjusted Cost: $3.6 trillion.
The $4.6165 trillion bailout dollars committed so far are about a trillion dollars ($979 billion dollars) greater than the entire cost of World War II borne by the United States: $3.6 trillion, adjusted for inflation (original cost was $288 billion). Go figure: WWII was a relative "bargain" in comparison. (Worse, the cost of this current credit crisis will only get bigger. It is estimated that by the time we get through 2010, the final bill may scale up to as much as TEN trillion USD.)
Now, how much is just ONE trillion dollars?
1 million stacked dollar bills is .067 miles, less than a tenth of a mile. 1 trillion dollar bills would be the equivilent of eight and a half planet earths stacked on top of each other. (1 US dollar bill is .0043 inches thick.)
One thousand times one million = one billion
One thousand times one billion = one trillion
In other words. One million times one million = one trillion
The trillion dollar stack would be one million times higher than the million dollar stack -or- picture it this way. It would take one million stacks of one million dollar bills to equal one trillion dollars.
If the million dollar stack is indeed .067 miles high, then the trillion dollar stack would be 67,000 miles high. (Fairly near to one third the distance from the Earth to the moon!)
Well-regarded Jim Bianco did the initial number crunching for the list you first read above, but there are other ways to depict this, such as percentage of GDP, or on a per capita basis...
Now here's a shocker: Bloomberg calculates another data breakdown for the total amount US taxpayers are on the hook for ($7.76 trillion) -- that is $24,000 for every man woman and child in the country. Bloomberg's data breakdown for that stunning figure can be found here. What does it equate to?
… that’s 4452.7 Big Mac meals @ $5.39 each for every man woman and child in the country.
… that’s a 2009 Chevrolet Malibu 4-door HYBRID Sedan for every man woman and child in the country.
… that’s 33.4 “average U. S. median monthly housing costs” for every man woman and child in the country.
… that’s 12,766 gallons of regular gasoline for every man woman and child in the country.
… that’s 323,944 more CEO’s at an average 2007 annual salary of $14.2 million each.
… that’s 373,983,739 pounds of gold @ $820/0z.
Regardless, no matter you calculate it, we are talking about an "ungodly" amount of money - and even though its officially a "loan" from the government, it's probably anybody's guess how much of it will ever get paid back!
Maybe, if Bloomberg wins their freedom of information suit we’ll find out the details of the commitments Paulson from Treasury and Bernake at the helm of the Fed have been making - or rather gambling - with our money. (Actually the treasure of our grandchildren and great grandchildren.)
Didn't Bernake's reply during hearings, that it would be 'counterproductive for the public to know what they are doing', strike anyone else as a display of sheer arrogance? Why on earth didn't he get grilled any further by those who represent "the people?" I "dreamt" that President Obama will consider calling for his resignation on Day 1 - and call for it publicly if he refuses. But I'm sure it was only a dream - for who would Obama be willing to put in his place at this point?
I realized today from catching up at Sojourners' daily digest (part of their "God's Politics" blog) that bailing out Citi is actually "old" news. We now have a new 800 Billion plan being floated to bail out 'the uncertain world of credit cards, student borrowing, auto loans, and cash-strapped small businesses.' Now Barack Obama is emphasizing how there's a 'rare consensus' among conservative and liberal economists, that a massive federal stimulus is necessary to revive the economy, even if it swells the federal budget deficit temporarily.
So, what do I really know? (Because I am certainly no economist!)
Well, I know that after trying to absorb all this, I do have serious nagging questions that I'm sure many other ordinary folks have as well:
--What happened to accountability by the bailed out banks that took in huge chunks of this money only to buy other banks (and give out bonuses to their executives) while remaining stingy on giving credit? (Will the same entities receiving all these government loans say someday, "Sorry, if we have to pay it back we'll go under?")
--And, what if this earlier "planned" bailout fails for lack of funds -- if this 4.6 trillion+ doesn’t manage to actually make it into the real world but remains ink on a page?
--Can we really trust what all these economists are saying? i.e. WILL "THE CENTER" HOLD?
Living outside America now in another country whose own government policies and latest news reports constantly feed off what is going on in the States -- as well as the rest of the world -- has only heightened my greatest concern, namely: Where is economic justice in all of this, and what about the incredible negative effects of America's recent actions on the rest of the world?
We are all networked together in a truly global economy, and there is no place to hide. So, how can America offer better leadership, among the other leading developed nations, beyond self-interest? Spend sufficient time and energy NOW collaborating with smaller developing nations to help protect their vulnerable economies from being dragged into depression as a direct result of key but virtually untested decisions by a few power brokers within the most powerful of nations?
I was "slouching towards Bethlehem" as I tried to absorb this overload of "reality." I went to the bank to find out where and how to invest in gold in this country. Here we are, missing the Thanksgiving holiday in America - feeling somewhat wistful without the traditional interaction among our dear friends and family members back in the States. (I sent out this electronic card to acknowledge what Carole Anne and I are missing right now, since we "risked all" and took the big leap in '08, to sojourn here to the far side of the world.)
But then as I began to reflect on the intangible rewards of having taken on lots of increased risk this year - to respond to a call - and let go of that which was formerly providing us with much "security" back in Indiana. No, it did not come "easy" but it all did come as a result of exercising a practical faith with the support of a caring community of faith that helps sustain us on this journey toward an uncertain future.
Here we are cultivating some wonderful supportive new friendships among people that really care. We have a mission to fulfill. It's not about our own comfort, but it's about helping to secure the comfort of others. That is where true happiness comes from - not from accumulation, but in giving of ourselves. We feel confident about the big picture because this sort of faith and assurance is rooted in an economy of gratitude -- in a God of love and grace, not fear. A God we believe was revealed fully through Jesus Christ - the best Source of security as we head into a very uncertain future -- in the earthly realm, that is!
Best of all, though I stumbled onto some gold today - right here - and some excellent guidance on "thinking THANKFULLY about money!" Don't miss finding it for yourself.
-Clair Hochstetler, Canberra, AUS
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