Numbers becoming meaningless as Paulson defends government intervention
Wednesday, Oct 15, 2008
The total potential cost of the financial bailout to the U.S. taxpayer is already rapidly approaching $5 trillion, over seven times as much as the meaningless $700 billion bailout bill figure.
Analysts have previously marked out the $5 trillion figure as the actual cost, now those predictions are becoming demonstratively accurate.
Meanwhile, Hank Paulson has defended government intervention, stating “There’s no doubt that the way to get the maximum bang for the taxpayers here was to invest in banks.”
Based on this Reuters summary and the sources linked within the table, here is a breakdown of the bailout’s cost to taxpayers so far.
|Cost To Taxpayers|
|$85 billion (+ extra request of $35 billion)|
|POSSIBLE TOTAL||$2.56 trillion+|
|NUMBER OF HOUSEHOLDS PER
|POSSIBLE COST PER HOUSEHOLD||
In addition, the U.S. government has said it will temporarily guarantee $1.5 trillion (£856 billion) in new senior debt issued by banks, as well as insure $500 billion (£285 billion) in deposits in non-interest accounts, mainly used by businesses.
These figures take the potential cost to $4.559 trillion+ – or $43, 221 per household.
Furthermore, when you account for the fact that the credit default swap market is around $62 trillion, and that derivatives worldwide are worth between between $1 and $2 quadrillion, the numbers start to become meaningless.
This article was posted: Wednesday, October 15, 2008 at 11:50 am