How much did you say, again?
Having trouble wrapping your head around the $700 billion figure for the Wall Street bailout plan? Here are some numbers to help you put the price tag in perspective:
Slate's Explainer puts the number at a bit less than Florida's Gross Domestic Product, and far less than the $9 trillion global cost of climate change. But it's still a big chunk of cash in individual terms:
"There are about 300 million men, women, and children currently living in the United States, so the bailout is equal to roughly $2,300 per person. That's right around what we each paid, on average, for gas and oil in 2006 ($2,227) and a bit less than our average personal tax burden ($2,432)."Stepping away from average Joes, $700 billion is equal to about 12 Bill Gateses."
The National Priorities Project, which crunches budget numbers from a public-interest standpoint, calculates that the bailout's estimated $700 billion cost would exceed current allocations for the Iraq war. And if all the money were spent back home, here's what it could buy:
51.6 million people with health care for four years, or181.2 million homes with renewable electricity for four years, or
2.9 million elementary school teachers for four years, or
27 million four-year scholarships for university students
It may be a while before Congress gets another opportunity to bat around this kind of money. But taxpayers might want to have their wish list ready the next time sum of this magnitude surfaces in Washington.
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Comments (2)
Here are two things $700 billion cannot buy:
1. Solvency for the Social Security system.
2. Keeping Medicare from going bankrupt.
Congress plans on sticking taxpayers with a $700 billion dollar bill to bail out financial institutions that were following a Congressional mandate to provide mortgages to 'disadvantaged folks with poor credit scores'.
The next two tidal waves will hit in 5-7 years when Social Security and Medicare become insolvent, forcing Congress to either abandon these failed social programs or attempt to burden our grandchildren with even greater debt.
My bailout plan: Since this mess was supposedly caused by defaulting sub-prime and adjustable rate mortgages, lets fix them. The fed should guarantee all mortgages while this emergency continues. But the mortgage must be truly in distress, the homeowner would need to be 3 months or more in default, and therefore suffer all the consequences against their credit rating. Then, the fed would acquire the loan. No windfall for the banks here, the acquisition price should be at a discount, and only for the outstanding principal. All accumulated unpaid interest and fees would be the banks' loss. The fed should then renegotiate the notes terms, setting a fixed interest rate and a repayment schedule the the homeowner can realistically live with. The fed should protect itself here, the loan should be collateralized not only by the property, but also by any of the homeowners future tax refunds. Modifications to bankruptcy law should also give these loans preferential treatment.