TMQ on Debt, Bailouts, and 2008

The 1980 Chrysler bailout, which was nationally debated for months before happening, cost $3.2 billion, in present-value dollars, and was financed by revenue rather than by borrowing. Here is the borrowing that’s happened in 2008 alone, with precious little public debate:

• $29 billion to bail out Bear Stearns.

• $40 billion in the first mortgage-holder bailout.

• $80 billion for an additional year of Iraq war operations. (Another $150-$200 billion in war costs such as future veterans’ disability benefits were incurred but not funded.)

• Up to $85 billion to bail out AIG.

• $153 billion to households for “economic stimulus.”

• $200 billion, and possibly more, to bail out Fannie and Freddie.

• $290 billion in farm subsidies, despite agricultural prices and grains profits being at record highs.

• $700 billion general bailout of securities backed by bad debt. (The International Monetary Fund estimates this figure will rise to at least $1 trillion.)

That comes to $1.6 trillion, explaining the debt-ceiling rise, and does not include roughly $300 billion in essentially interest-free cash issued to banks by the Federal Reserve on an emergency basis, which may or may not be repaid, but which in any case make all existing money somewhat less valuable. Why is the debt aspect of the splurge barely being remarked on by the mainstream media and by politicians? Why are the young not furious? And about that $700 billion about to the shoveled to the Wall Street elite — in 2007, George W. Bush vetoed an increase of $7 billion per year in health care spending for the poor, saying the country couldn’t afford it. (via)