Thoughts on Bailouts

Posted: May 14th, 2010 by Militant Libertarian

I was thinking about the bailouts again, now that Goldman Sachs and Co are all being finger-pointed in the popular press as the evildoers behind the economic collapse.  In the same breath, amazingly, these same news commentators (so far, I’ve seen little reporting, but a lot of commentary – which is what passes for reporting in the popular media) will talk about the “new wave of sub-prime mortgages” and how these evil thumb-suckers and mouth breathers who were obviously too stupid to really own a home are now going to default on them again because they can’t pay their bills.

Which amazes me, since by that analogy, the suits at Goldman Et Al are the same kind of knuckle-dragging nitwits who can’t pay their bills either.  They had to go to Big Daddy Government to beg for a handout like frat boys who spent all their rent money on booze.

Regardless, that got me thinking about the sums of money being thrown around here.  Now, I’m not mathematician.  I started with computers early because I figured out that they could do my Algebra homework for me.  I use a calculator to balance my checkbook because, well, adding three numbers at once is hard.  Technology is my friend.

(As a further side note, while I can’t add and subtract worth a damn, I know the measurements of my right foot (bare and in my favorite boots), my left hand (base to longest finger tip and spread in “5”), the last knuckle on my thumb, and my left and right arm cubits.  Why?  Because that’s how I measure things while building stuff, that’s why.)

So, back to these numbers.  Commonly, it’s said that the Treasury had a total of $700 billion ($700,000,000,000) to give out to the banks as bailouts, though they say they haven’t given all that out (yet).  Doesn’t matter.  $700B is the number tossed around a lot.  The true number, of course, is anyone’s guess.  That’s not the point of this little ramble.

The last time I checked, there were something like 375 million (375,000,000) people living in the U.S.  So I (had my computer) do some math.  This can be considered from two angles.  Let’s assume, first, that the problem had really been “sub-prime mortgages” and so the housing market was the real reason behind the economic collapse.  Now let’s assume that the FedGov was going to hand out that $700B no matter what.  Let’s also assume that Wall Street and Washington weren’t all in bed with each other and that the House of Repressives and the Senaterrorists really had the interests of the American people at heart.

Gee, solution seems pretty simple to me.  Mortgages are the problem.  So why not pay everyone’s mortgage?  Oh, wait, that only favors “the rich” (you know, people with houses – we’re all loaded, donchaknow).  Gotta be mo democrapic about it.  So let’s just give every American, regardless of age, sex, religion, color, ethnicity, or sexual orientation (because, after all, we’re Equal Bailout Givers) a lump sum.  That seems fair.

So… 700,000,000,000 / 375,000,000 = 1,866,660,000 (give or take a few, I rounded down).  I’ll take it!

I don’t know about you, but my house didn’t cost 1.86 billion dollars.  In fact, it cost such a tiny fraction of that, that it’s got a lot of zeros after the decimal before you see another number.  So let’s say that the Potomac Boys decided that they would save the (future) taxpayers a few bucks and instead just give everyone $100k to pay off or use as money down to refinance their mortgages.  If they don’t have a mortgage, well, they can now.  That would build jobs too!  Hell ya!  This is getting easier and easier to sell to the donut eaters every minute.

So.. 100,000 X 375,000,000 = 375,000,000,000  That’s a savings of $325 billion bucks.  I’ll take it!

But wait.. if those $700B bailouts add up to $1.86B per person in the U.S., that’s a lot of money.  I don’t know about you, but I don’t see it in my future to make $1.86B (adjusted for inflation) in my lifetime from here forward.  I highly doubt my kid will make that kind of cash either.  Even Bill Gates doesn’t have that kind of liquidity.  I don’t think Warren Buffet does either – I think he sent it all to that Chinese car company.

Think about that the next time you’re reading a news story about someone in Washington wanting to figure out how to “stimulate the economy” by dumping billions of dollars into it.  Those billions come from somewhere.  There are 1,000 millions in a billion.  So every billion bucks spent requires that every single American pony up $2.66.  So when those Potomac Fever Junkies in D.C. talk about spending $100 billion here or there, that equates to $266 dollars from YOUR pocket.

I won’t take THAT!

*For the record, here are photos to prove my measurements.  I’m a man.  These things are important to me.


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