Pardon the hyperbolic title, but let's put the planned government bailout in perspective.
What kind of money are we talking about?
Paulson: "hundreds of billions"
Not very specific, but I've seen estimates ranging from $400 to $1000 billion. Remember, the US taxpayer has already anted up $200 billion in guarantees for Fannie & Freddie, and $85 billion for AIG.
OK, assume that the whole package will cost $750 billion, which may even be too conservative. Let's put that in perspective. $750 billion is:
- $2500 per person in this country. Hear that sucking sound?
- Roughly equal to expenditures in the "War on Terror" (to date -- future costs of the war will be substantial). That explains the title of this diary.
- About 6% of the US mortgage market
- The annual DOD budget
- The cost of nine Katrinas
That's right -- in the blink of an eye, Congress and the President are authorizing the equivalent of the Iraq & Afghanistan wars. Where's the policy debate and what are the alternatives? Why does this all boil down to an emergency session where legislators are handed a pen and told to sign here?
This is a colossal failure of leadership by the President and Congress. It's time for a change.
UPDATE: A good summary of cost estimates for this bailout came out in the NYT this morning.