When you stack it all up…
July 4, 2009
Our nation’s birthday… a time to look back, to consider our triumphs and failures, to put our current situation into perspective, and to search for lessons that might help us better navigate into our future…
From Barry Ritholtz, financial analyst and author of Bailout Nation, in his Big Picture blog:
It is exceedingly difficult to convey exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large. I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.
So I once again went to Jess Bachman at Wallstats. I gave him my list of expenditures [bailout expenses, and major national investments/expenses since 1803] (inflation adjusted of course!) and he went to work. This early Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or otherwise committed.
It is nothing short of astonishing.
It includes the total outlay for all the bailouts to date. In just about one short year (March 2008 - March 2009), the bailouts managed to spend far in excess of nearly every major one time expenditure of the USA, including WW1&2 (omitted from graphic), the moon shot, the New Deal, total NASA budgets (omitted from graphic), Iraq, Viet Nam and Korean wars — COMBINED.
206 years versus 12 months. Total cost: ~$15 trillion and counting . . .
(For a strikingly– and depressingly– clear graphic explanation of how we got into this mess, click here for another collaboration between Ritholtz and Wallstats.)
But lest we end on too grim a note, this morning’s update from Jim Fallows:
Yesterday, as part of the Atlantic’s role in the Ideas Festival, I got to moderate a discussion among some 30 people who were big shots from public and private realms. The presidents of two of the leading research universities in the world. A sitting governor. The CEO of a major (non-US based) technology firm. Scholars and public officials and financiers and economists and corporate executives and writers. Unlike most of the sessions here (see videos etc at this main page), these mealtime discussions are not on-the-record so I’m not supposed to give a blow-by-blow.
But I can say that at the end of the discussion I asked for a show of hands on a simple good news / bad news question. The question was whether the current economic/political/environmental emergency around the world would be a “successful crisis” or a “failed crisis.” That, is would today’s sense of emergency lead the United States, in particular, to address some of its fundamental fiscal, political, social, environmental, educational, etc problems, so that it came out of the crisis stronger than it went in? Or would it be a missed opportunity, a “wasted crisis,” in which the U.S. system would avoid dealing with any fundamental issues and therefore would come out of the immediate travails in worse shape than when it went in?
The results were three- or four- to one positive. Nearly twenty people voted for the “successful crisis” interpretation; only five or six expected a “failed crisis.” This is not proof, and it may be simple wish fulfillment. But I was surprised by the results — and, how could I help but be? encouraged by them.
