Value of 2008 Bailouts Exceeds Combined Costs of All Major U.S. Wars

[Jesus Jones]

(CNSNews.com) – The total value of the bailouts undertaken by the federal government in 2008 now exceeds the combined cost of every major war the United States has ever engaged in, according to a comparison of war costs calculated by the Congressional Research Service (CRS) and the value of the bailouts as calculated by Bloomberg News or Bianco Research.

According to CRS, all major U.S. wars (including such events as the American Revolution, the War of 1812, the Civil War, the Spanish American War, World War I, World War II, Korea, Vietnam, Iraq and Afghanistan, but not the invasion of Panama or the Kosovo War), cost a total of $7.2 trillion in inflation-adjusted 2008 dollars.

According to Bloomberg, the federal government has made commitments worth a total of $8.5 trillion in the bailouts of 2008. That includes actual expenditures as well as loan and asset guarantees.

Bianco Research puts the total value of the bailouts at $8.7 trillion.

CNSNews.com - Value of 2008 Bailouts Exceeds Combined Costs of All Major U.S. Wars

[baldrick]

I wonder if the swiss printing machine manufacturers are accepting payment in USD.



it was a joke - I realise that all this money is not actually being printed

[bkkandrew]

I wonder if my view of the last 6-months that the US will go bankrupt and the dollar will collapse is becoming mainstream now?

[Jesus Jones]

^ That's just plain conspiricy!

[boatboy]

And heres a picture

[Jesus Jones]

By Steve Watson

A former member of the Bank of England’s Monetary Policy Committee has predicted a massive collapse of the dollar within the next two to five years, warning that a government increase in spending under President elect Obama could be disastrous.

Willem Buiter, who served the BOE from June 1997 to May 2000, has stated that he expects to see the plug pulled from under the dollar as foreign investors turn away from the dollar and other US backed assets including government bonds.
Writing for the Financial Times, Buiter, now a Professor with the London School of Economics European Institute, comments: “There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place.”

Buiter, who has previously advised the World Bank, the IMF and the European Commission, points out that the dollar has managed to stay afloat due to the misguided notion that the US can make more capital on overseas investments and interests than foreign investors can make on US assets - a hypothesis that economists have referred to as “American alpha”.
However, he believes the global financial crisis has exposed the fatal flaws in that assumption.

“The past eight years of imperial overstretch, hubris and domestic and international abuse of power on the part of the Bush administration has left the US materially weakened financially, economically, politically and morally,” Prof Buiter writes. “Even the most hard-nosed, Guantanamo Bay-indifferent potential foreign investor in the US must recognise that its financial system has collapsed.”

Buiter warns that a Keynesian-style increase in public spending, the economic stimulus plan mooted by President elect Obama, will not work in the long term because underlying the fundamentals of the US economy is what he describes as a “deep structural rot”.

“If the authorities go ahead with the short-run Keynesian stimulus without having convinced the global capital markets and domestic producers and consumers that there will be a timely reversal, the policies will not work.” Buiter states.

“If the government is believed to be fiscally continent (future taxes will be raised and/or future public spending will be cut by enough to safeguard the solvency of the state) but turns out not be so after all, the Keynesian fiscal policy will be effective in the short run (as long as the public believes in the fiscal virtue of the government) but will become highly contractionary once the truth dawns.” he continues.
Buiter also states that he expects Federal authorities to allow the dollar to depreciate under an inflationary monetary policy, rather than default on Federal debt.
“The US Federal government has taken on massive additional contingent liabilities through its bail out/underwriting of the US financial system (and possibly other bits of the US economic system that are too politically connected to fail).” Prof Buiter comments. “Together will the foreseeable increase in actual Federal government liabilities because of vastly increased future Federal deficits, this implies the need for a future private to public sector resource transfer that is most unlikely to be politically feasible without recourse to inflation. The only alternative is default on the Federal debt. There is little doubt, in my view, that the Federal authorities will choose the inflation and currency depreciation route over the default route.”
Buiter warns that this course of action on behalf of the Federal government is unsustainable and will ultimately lead to a massive dollar collapse.

“If I can figure this out, so can anyone in the US or abroad who follows recent economic developments. The dawning of the realisation will lead to the dumping of the assets.” he concludes.

[barbaro]

I wonder if my view of the last 6-months that the US will go bankrupt and the dollar will collapse is becoming mainstream now?

The US government becoming insolvent/bankrupt is possible.

To avoid insolvency, there would be very painful remedies. This would include eliminated (or significantly reducint Entitlements).

People would be very unhappy.

But honestly, I think they should have known that this was a possibility. It's been talked about for decades.

[baldrick]

environmentally sound energy creators ask for bailout assistance

Larry Flynt and Joe Francis seek $7bn bailout for US porn industry


TWO porn moguls, including Hustler magazine founder Larry Flynt, are seeking a $US5 billion ($7 billion) bailout from Washington, arguing that the limp US economy has thrown cold water on the adult entertainment industry.
Flynt and Girls Gone Wild video series creator Joe Francis asked the newly convened 111th Congress to rejuvenate the sexual appetite of America'' in a bailout move similar to the one set aside for US car manufacturers.
"Congress seems willing to help shore up our nation's most important businesses, (and) we feel we deserve the same consideration,'' Mr Francis said in a statement.
"In difficult economic times, Americans turn to entertainment for relief. More and more, the kind of entertainment they turn to is adult entertainment.''
The pair were quick to admit that "the $13 billion industry is in no fear of collapse, but why take chances?''
Francis, recently imprisoned for nearly a year on a prostitution-related charge after pleading no contest in a plea bargain, cited industry figures that show adult DVD sales and rentals decreasing 22 per cent in 2008, as people turn to the internet for adult entertainment.
"With all this economic misery and people losing all that money, sex is the farthest thing from their mind,'' Mr Flynt said.
"It's time for Congress to rejuvenate the sexual appetite of America. The only way they can do this is by supporting the adult industry and doing it quickly.''
Flynt said people were "too depressed to be sexually active.''
"This is very unhealthy as a nation. Americans can do without cars and such, but they cannot do without sex.''

[baldrick]

this is fcukin funny

Jim Willie of the Hat Trick Letter notes that Bloomberg has filed a lawsuit against the Federal Reserve to force the Fed to give some details about where in the hell US$700 billion went after disbursement from the TARP financial rescue funds, a request and a lawsuit that the Fed is steadfastly fighting, tooth and nail.

Bloomberg.com reports it as "The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and the assets the central bank is accepting as collateral", which Bloomberg thinks is is entitled to "under the US Freedom of Information Act."

The reason the Fed gives is that trade secrets are in there somehow! Mr Willie says, "The US Fed will continue to withhold internal memos as well as information about trade secrets and commercial information.

[DaffyDuck]

And heres a picture

Do recall, that for years we were told there was no money for health care...