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> Wasn't most of that money repaid with interest? But how much did it cost to borrow the bailout money at first place ? I'm pretty sure the US government didn'

by aikah 10y ago

> Wasn't most of that money repaid with interest? But how much did it cost to borrow the bailout money at first place ? I'm pretty sure the US government didn't have trillions in cash at that time.

maxerickson 10y ago
The cost was very low, treasury rates dipped below 1%. https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2008 https://www.treasury.gov/resource-center/data-chart-center/i...
- toomuchtodo 10y ago
  Because the Federal Reseve printed trillions of dollars out of thin air.
- TuringNYC 10y ago
  The cost was not low -- rates dipped below 1% because the Fed printed money. But printing money is not free. The common person pays for it by earning less on savings and in the form of inflation, especially retirees who diligently saved through their lives hoping to earn and live off interest in their old age. Every person purchasing a house pays more for low rates because housing prices go up, so do all the associated fees which are on the Notional value (e.g., title insurance.) Pension funds "pay" for it because they cannot easily make money via bonds any longer.
  - paulmd 10y ago
    It all depends on whether you're a net debtor or a creditor, and at what rates. Printing money tends to increase interest rates, which benefits debtors (anyone who owes money on a credit card, student loan, or a mortgage - which is pretty much everyone). If inflation is happening, you get to pay back your today-money-debts in weaker-future-money which means you pay less in real terms. Regardless, not all that much of the quantitative easing money actually entered the economy because it was largely hoarded by banks to shore up their balance sheets post-collapse.
    - TuringNYC 10y ago
      "not all that much of the quantitative easing money actually entered the economy" Consider housing prices being at enormous highs throughout the country -- that is directly related to low interest rates. It affects all people who dont own a home. It benefits land and home owners. It is a lop-sided benefit bourne by the young and poor.
  - maxerickson 10y ago
    Treasury rates are set by a market auction, the Fed can't drive them down just by printing money. If investors anticipate inflation, they will factor it into their bids. I guess whether you think the negative effect of the bailout on savings and such were worth it depends on whether you think the entire insurance market almost collapsed.

by aikah 10y ago

> Wasn't most of that money repaid with interest? But how much did it cost to borrow the bailout money at first place ? I'm pretty sure the US government didn't have trillions in cash at that time.

maxerickson 10y ago

The cost was very low, treasury rates dipped below 1%. https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2008 https://www.treasury.gov/resource-center/data-chart-center/i...

toomuchtodo 10y ago
Because the Federal Reseve printed trillions of dollars out of thin air.
TuringNYC 10y ago
The cost was not low -- rates dipped below 1% because the Fed printed money. But printing money is not free. The common person pays for it by earning less on savings and in the form of inflation, especially retirees who diligently saved through their lives hoping to earn and live off interest in their old age. Every person purchasing a house pays more for low rates because housing prices go up, so do all the associated fees which are on the Notional value (e.g., title insurance.) Pension funds "pay" for it because they cannot easily make money via bonds any longer.
- paulmd 10y ago
  It all depends on whether you're a net debtor or a creditor, and at what rates. Printing money tends to increase interest rates, which benefits debtors (anyone who owes money on a credit card, student loan, or a mortgage - which is pretty much everyone). If inflation is happening, you get to pay back your today-money-debts in weaker-future-money which means you pay less in real terms. Regardless, not all that much of the quantitative easing money actually entered the economy because it was largely hoarded by banks to shore up their balance sheets post-collapse.
  - TuringNYC 10y ago
    "not all that much of the quantitative easing money actually entered the economy" Consider housing prices being at enormous highs throughout the country -- that is directly related to low interest rates. It affects all people who dont own a home. It benefits land and home owners. It is a lop-sided benefit bourne by the young and poor.
- maxerickson 10y ago
  Treasury rates are set by a market auction, the Fed can't drive them down just by printing money. If investors anticipate inflation, they will factor it into their bids. I guess whether you think the negative effect of the bailout on savings and such were worth it depends on whether you think the entire insurance market almost collapsed.