Bailing Out The Taxpayers For A Change
By Howie Rich
Sometimes it's important to try and fathom the unfathomable.
For example, why is “thirteen” considered an unlucky number? Why do pigs continue to fly in Washington D.C. (no matter which party is in power)? And why would a nation already in the throes of unsustainable deficit spending think that it could somehow spend its way out of an economic downturn – to the tune of $13 trillion (and counting)?
That's right – since the beginning of the current recession, the federal government has spent, lent or pledged $13 trillion on various “economic recovery” efforts.
How big is that number?
Well, if you were to spend a dollar every second, it would take 412,000 years to blow through $13 trillion.
If you were to lay 13 trillion $1 dollar bills end-to-end, you could travel to the sun and back – five times.
And if you were to put all of those $1 bills on a scale, you'd be talking about 28 million pounds – or the weight of 462 Statues of Liberty.
In a calamitous coincidence, those mind-boggling figures mirror an equally monumental sum - the $13 trillion that has been lost in the U.S. stock and housing markets since October of 2007.
As our Chinese friends would likely say, that's an awful lot of ‘yang' and no ‘yin.'
Worse still, even bigger numbers could be forthcoming – on both counts.
“The president and Treasury Secretary Geithner have said they will do what it takes,” Goldman Sachs CEO Lloyd Blankfein said last month. “If it is enough – that will be great. If it is not enough, they will have to do more.”
That's certainly a convenient perspective coming from someone whose firm has been the beneficiary of multiple bailout billions, isn't it?
In fact, with so much money flowing out of Washington these days, it's useful to consider just how much of it is actually winding up in the pockets of U.S. taxpayers – whose sons and daughters are ultimately going to have to repay it all.
Based on the latest calculations from the “American Recovery and Reinvestment Act,” the answer is “not much.”
For example, President Barack Obama's much bally-hoed “recovery” package is adding only $13 to the average American paycheck each week, which analysts agree isn't going to do much of anything to increase consumption.
Numbers like that make you scratch your head and think about what “might have been.” Like what would have happened if our policymakers had taken the total value of all the bank and bureaucratic bailouts over the past 18 months and given that money directly to the people?
Assuming the current U.S. population of 306,000,000, you'd be talking about $42,483.66 pilfered from every man, woman and child in America to pay for propping up a failed financial system that is only further weakened by watering down the currency in this manner.
Think about that for a moment - that's nearly $170,000 from every family of four. This is the debt to which they are being hopelessly shackled to, and they will never be able to pay it back.
Assuming this was tax-free income that could be invested back into the economy – the total amount would have been nearly equal to last year's gross domestic product of $14.2 trillion.
That's a huge chunk of change – in fact, it's more than fifteen times the value of the cash currently circulating through the American marketplace.
If even a fifth of that cash was spent on domestic consumption, you'd be looking at an economic revival the likes of which this nation has never seen – a real “stimulus” that might actually justify all the borrowing.
But that's not Washington's definition of a “recovery.”
Instead of targeting the American people directly, they are pouring all of this borrowed money into failed banks and bureaucracies by the billions – with little to no oversight, accountability or transparency.
It's “trickle-down” welfare – a colossal investment in failed institutions and a colossal failure to truly invest in the American people.
Trying to borrow ones way out of debt in any way, shape or form is insanity, but the least D.C. politicians could have done was to put the money into the pockets of the American people.
Maybe that would have “stimulated” something other than an explosion of government debt.
The author is Chairman of Americans for Limited Government.