What US$700 billion bailout? It's just $3,324 a head / a dollar a day!
Let’s do a reality check on the spending spree the U.S. Treasury is currently on:
Troubled Asset Relief Program: $700 billion
Fannie Mae and Freddie Mac: $200 billion (est.)
AIG: $85 billion
Bear Stearns: $29 billion
Current running total: $1,014 billion
Current U.S. population: 305 million
“Cost” per citizen: $3,324 (the equivalent of one dirty long weekend at the Wynn in Las Vegas)
10 year U.S. bond: 3.80%
Annual carrying cost per citizen: $126.31 (barely $10/month)
Annual principal and interest payments over 10 years: $405.75 (just over $1/day)
Congress is putting the Fed Chairman and the Treasury Secretary through their paces, but at the end of the day, the politicians know that this proposal needs to be passed in some way, shape or form. There may be warrants or CEO salary caps, but it is going to happen. U.S. Voters need to see their representatives wringing their hands over the “Wall Street Fat Cat bailout” concept, but that is more about the election on November 4th than anything else.
For all of the mayhem of the past 18 months, individual Americans are being asked to give up a long weekend in Vegas to save their financial system. That’s bad for the retailers at the Fashion Show Mall on Las Vegas Blvd. South, but it is definitely good for the rest of us.
MRM
Let’s not be cavalier about the impact on families.
There are 105 million households in America so the debt is $6,636 per household.
The median income of American households is $44,334.
The debt is equivalent to 15% of annual per-household income. Imagine what that would do to a family’s borrowing capacity.
No weekends in Vegas. Maybe a chicken in every pot but no new car in every garage.
MRP
Those numbers are very big, and very scary. With over a TRILLION said to be allotted it reminds me of my university economic lectures where we discussed the impact of substantially increasing the money supply within a short period. From what I recall, this is the prime factor for triggering an increase in inflation which if not proplery contained WILL lead to a state of hyperinflation. Imagine a holding a $5 but only about to buy $2.50 worth of goods and services? The devaluation of the dollar is next in line, and we need to initiate proper mechanisms in order brace for the impact that this may have on our economy. At the end of August we had approximately U.S.$6.9 trillion in trade deficit, and this amount is increasing at a rate of approximately U.S.$60 billion each month. Source Our trade defict combined with the excessive spending makes me very skeptical in our course of recovery. But it’s currently in the hands of the government, and I can’t say I’ll be supporting their every decision.