Monday, March 30, 2009
Four wars, a Moon landing and the rebuilding of Europe: all that and more could have been paid for with the cost of the US government's proposals for saving its banking industry.
Last week's instalment of the great bailout - the government's pledge to buy up to $1tn of toxic assets in conjunction with the private sector - brings the total US rescue initiatives to $11.6tn. Only one other event in the past century has cost more than $1tn, after adjusting for inflation, and that was the second world war. Add in the cost of nine other 20th-century initiatives, from the war on terror to the New Deal, and the total is $7.5tn - less than two-thirds of the banking bailout.
The Marshall Plan, intended to rebuild Europe after the devastation of war, cost less than a hundredth of the value of the banking rescue. Add in the price of two other US economic packages - the New Deal and the Savings & Loan bailout of the 80s - and the $887bn cost is still well under a tenth of today's total.