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I still don't see how that makes the article factually incorrect. The article doesn't claim that the bailout is not an investment. It simply says "Hey, this i

by jcl 18y ago

I still don't see how that makes the article factually incorrect. The article doesn't claim that the bailout is not an investment. It simply says "Hey, this is an awful lot of money that's all going out at once". Never mind that we may or may not get it back (although if the parties involved could measure risk accurately, we wouldn't be in this mess) -- but the bailout amount is so much that we have nothing else to compare it to other than these massive expenditures. There's no other way to get a sense of scale. If you only want to compare it to investments, the only thing I can think to compare it to is the Chrysler bailout, which IIRC we eventually made some profit on. The S&L bailout is already in the list, and we lost on that one. But both of these are orders of magnitude smaller than this bailout. (And when I said that no attempt is made to calculate dividends, I meant within the article, not within human history.)

krschultz 18y ago
Yes it does. "If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. " These are not costs, they are guarantees. A cost is 100% sunk, no one knows exactly what percentage of these guarantees will ultimately be costs. But if it nears 50%, the bigger problem will be the number of homeless people in this country not the amount of money spent trying to prevent this from happening. And considering now a lot of mortgage companies are renegotiating and trying to prevent foreclosure, it is unlikely a lot of this money will end up being spent. He makes no acknowledgement of that and therefore it is mis characterizing the expenses.
- jcl 18y ago
  Hmm... It seems a big fuss over the semantics of a single word, then, especially as you seem to be using it in a non-standard way. No one says, for example, "I bought a car yesterday, but I won't know how much it cost until I eventually sell it." The bailout has an up-front cost -- an opportunity cost if nothing else. That's $4.6 trillion that suddenly cannot be used for something else, right now, regardless of the value of the assets we are purchasing.

by jcl 18y ago

krschultz 18y ago

Yes it does. "If we add in the Citi bailout, the total cost now exceeds $4.6165 trillion dollars. " These are not costs, they are guarantees. A cost is 100% sunk, no one knows exactly what percentage of these guarantees will ultimately be costs. But if it nears 50%, the bigger problem will be the number of homeless people in this country not the amount of money spent trying to prevent this from happening. And considering now a lot of mortgage companies are renegotiating and trying to prevent foreclosure, it is unlikely a lot of this money will end up being spent. He makes no acknowledgement of that and therefore it is mis characterizing the expenses.

jcl 18y ago
Hmm... It seems a big fuss over the semantics of a single word, then, especially as you seem to be using it in a non-standard way. No one says, for example, "I bought a car yesterday, but I won't know how much it cost until I eventually sell it." The bailout has an up-front cost -- an opportunity cost if nothing else. That's $4.6 trillion that suddenly cannot be used for something else, right now, regardless of the value of the assets we are purchasing.