I, like many here on DailyKos, the country, and the world, have been watching with mouth agape while the US Treasury and FED promises trillions and trillions of dollars to unsound banking institutions and other shady entities (AIG).
I decided to crunch some numbers tonight cause I have nothing better to do between tours and came up with a surprising number.
If the current pledge bailout numbers were equally distributed to every single US citizen age 18 or older it would come to $37590.12 !
How did I get to this number?
Bloomberg article number 1.
Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.
The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg.
SusanG blogged about this a few days ago as well...
Bloomberg article number 2
Nov. 25 (Bloomberg) -- The Federal Reserve took two new steps to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion.
The central bank will purchase as much as $600 billion of debt issued or backed by government-chartered housing-finance companies. It will also set up a $200 billion program to support consumer and small-business loans, the Fed said in statements today in Washington.
Wow.
So I went to the US Census website and crunched some numbers. They have a nice excel spread sheet that you can download that lays out all sorts of juicy information.
So I went to their projected census results and the most up to date data is for July 2007.
I downloaded their excel sheet and found this:
- 18 to 64 years 189,831,466
- 65 years and over 37,887,958
Total population 18 and over = 227,719,424
So if we take the pledge bailout money to date that would = 8,560,000,000,000 That's 8.56 trillion, and equally divide that by the census numbers for everyone 18 and older we get $37590.12 for each and every person!
I am well aware that there are many gray areas as for the exact number, such as whether or not your in prison, possible expats, and you can start working at age 14. Even if you were to fudge the numbers for those, and I am sure other exceptions, I doubt it will push the number very far from this original quote.
What I find most stunning from these numbers is that if millions of family's were to get a check for about 70 grand a piece, the same families that owe the debt to these failing banks, they could meet their original debt obligations, and the banks would not be failing as they are now.
On top of that the MBS's market, and the CDS market which is tied to the MBS market, would instantly settle down because the fear of default by millions of Americans would instantly disappear. And then the 'credit' crisis would no longer exists, because large institutions would not fear whether or not a certain bank could repay a short overnight line of credit a few billion. (because the loans they are servicing have now become substantially healthier)
The TED Spread would fall, the A2-P2 spread would decrease, small, mid size, and large cap companies would once again be able to access capital at competitive rates and most importantly falling housing prices would subside because US citizens could make their mortgage payments.
In any event I am willing to bet that if the cash was put in the hand of the American consumer that it would have stimulated our economy, (and the global economy) in a much more effective and permanent fashion than this current boondoggle.