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700 Billion Dollars
- tomsaffell 18y agoNot really a fair comparison - the 700BB is not being spent in the consumer sense of the word. It is being used largely for investing (albeit sometimes in toxic assets). Those may in time deliver a return. I'm not saying it's the best (or only) thing that could have been done, but buying McDonalds pies it is not.
- stevedekorte 18y agoThe government is buying overpriced assets (mortgage bonds on homes bought for 2x the inflation adjusted norms and corporate junk bonds) whose market value has dropped so much that they made the balance sheets of financial companies negative. Their solution was to move them to the public's balance sheet. Perhaps the real asset prices will rise and the financial companies will be wishing they didn't sell, but who are we kidding? The folks on Wall Street will be vacationing on their super yatchs as the American taxpayer is buried in the debt of their bad investments.
- stevedekorte 18y ago$700B is the tip of the iceberg. With Fannie Mae and Freddie Mac, US taxpayers are now on the hook for paying off $5T in mortgage bonds. And add to that the unknowns on AIG's balance sheet which may run into the trillions as well.