Lance at The QandO Blog has put together a spreadsheet calculating the total cost to date of all the economic bailout programs (click to enlarge):
As Lance notes:
I suspect given the continuing issues and a President intent on expanding the government balance sheet even more than our present one that that spreadsheet will get quite a bit larger. All that money to save a $13 trillion economy. What a mess.
The question is, when will these chickens come home to roost ?
December 3rd, 2008 at 8:53 am
This is just a really difficult problem to solve (duh). The problem is that no one really knows how to solve asset deflation. The only logical way is just to let markets brutally discount until the point that people will buy no matter what. This leads to the leverage problem, which is the reason our balance sheet is exploding. However, any sane person with a novice financial background knows you can’t irrigate the system with that much fiat money without inflating the currency. The UST really is playing Russian roulette here. There’s got to be 1.) a cohesive strategy to keep all these transactions sterile that will make 2.) an exit strategy to mop up all the excess liquidity feasible before confidence completely erodes and we see a run on the dollar.
That’s the Armageddon scenario
January 4th, 2009 at 10:46 pm
Bring back the Glass/Steagall Act of 1934 that was over turned by Phil Gram in the Gramm/Leahy/Bliley Act. Repeal the Commodities Modernization Act that allowed derivatives to be deregulated.
The exit from the first Great Depression was to devalue the dollar in relation to gold. Somehow they’re going to have to devalue the dollar or even come up with a new currency.
January 7th, 2009 at 2:41 am
[...] http://belowthebeltway.com/2008/12/03/the-8-trillion-dollar-bailout/ [...]