Bailout Costs vs Big Historical Events

It is exceedingly difficult to convey exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large.  I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.

So I once again went to Jess Bachman at Wallstats. This Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or  otherwise committed. It is nothing short of astonishing.

It includes the total outlay for all the bailouts to date. In just about one short year (march 2008 –  March 2009), the bailouts managed to spend far in excess nearly every major one time expenditure of the USA, including WW2, the moon shot, the New Deal, Iraq, Viet Nam and Korean wars — COMBINED.

206 years versus 12 months. Total cost: ~$15 trillion and counting . . .

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bailoutnationchart-912x1024.jpg

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Note: This was finished too late to make it into the hard cover edition of Bailout Nation, but it will be in next year’s paperback, and whenever the Kindle version finally shows up.


Originally published at The Big Picture and reproduced here with the author’s permission.

12 Responses to "Bailout Costs vs Big Historical Events"

  1. Anonymous   June 18, 2009 at 9:39 am

    If these outlays are not inflation-adjusted, then they are a bit misleading. I’m very sure if you compounded their dollar amounts to inflation, you’d see an immensely larger right side of the graphic. Nonetheless, the time period of the outlays still make it astonishing.

  2. Atanas   June 18, 2009 at 10:02 am

    A very telling chart, but are we talking nominal or real dollars here?

  3. Guest   June 18, 2009 at 11:06 am

    and barely a question asked

  4. Apples and Oranges.   June 18, 2009 at 12:07 pm

    Grossly misleading. These “cost” amounts for the bailout are not “net subsidies”, unlike the true costs for the historical events such as the S&L crisis.

  5. Anonymous   June 18, 2009 at 1:00 pm

    The Marshall Plan to get Euope back on its feet peacefully was a drop in the bucket of the cost of WW2.The WW2’s real cost to the USA (stated but not drawn) would be 100x the size of the $50B reference block:http://en.wikipedia.org/wiki/Military_production_during_World_War_II#Gross_domestic_product_.28GDP.29

  6. Guest   June 18, 2009 at 6:47 pm

    As a fellow “chart nut” I’m deeply disappointed in your choice of illustration here.I normally look forward to your posts, but this is rubbish.

  7. Nadine bt   June 19, 2009 at 2:35 am

    This is not a particularly insightful chart – a bar graph would do just the same. it is also misleading because not all of the cubes are direct outlays. In addition, the numbers (or bars/cubes whatever) should be portrayed both in real terms and as a % of GDP.

  8. Sebastian   June 19, 2009 at 3:50 am

    hope this gets an update in line with the suggestions made above?could be a really helpful chart if adjusted accordingly…

  9. Guest   June 19, 2009 at 3:58 am

    One of the things we forget is that real dollars held their value or very close to it for many many years. Oar family had a Victorian Grandma who was given UKP4 per week for housekeeping in the late 1890s when first married, and she felt no need to ask for more through the sixty plus years of her marriage.The first major inflation period we experienced in Australia was when Whitlam was in power in the 1970s. Everything went up, and has kept going. So the discount rate is uneven, as is inflation, and some others – population curves,speed of travel curves (except in cities!!).. The most interesting thing is whether we can keep climpbing the increasingly asymptotic curve, or there will be a massive crash..

  10. Anonymous   June 19, 2009 at 5:02 am

    Mr Ritholtz, is inflation taken into account? (Clearly it is absolutely fundamental to include this to get a fair picture).Thank you

  11. Ken Baker   June 19, 2009 at 10:32 pm

    This is just one more guy trying to play big shot with trashy numbers.For example, the “Commercial Paper Funding Facility” that was not a “bail out”. What happened is that because banks could not value their assets, they had to stop making short term commercial paper loans. Banks loan money at a rate of 10 to 30 times their reserves. In effect they print money. The banks commercial paper loans were part of the money supply. When the banks no longer were lending, the fed substituted its open market window and bought 2 trillion in commercial paper. There is no reason to believe that the commercial paper is not every bit as sound as it was in the hands of the banks. Unless these entities fail by reason of events at a later date, the U.S. should get all the money back.On the other hand, if the Fed had not bought their commercial paper, employers of tens of millions would have to close down making the great depression look like Sunday school.Several banks already want to repay $50 billion of their bailout money.My recollection is that while the potential government obligation on the Money Market Investor Funding Facility is quite large, the amounts taken down are very small and it appears unlikely any more will be taken down, so this is grossly misleading.The GM and Chrysler bailouts were a travesty. Most of what Obama did there was transfer money from the taxpayers to cover the Union Pension funds and health care plans, and saddle the surviving corporation with the duty to pay it back. There is a program for pension funds of companies that go into bankruptcy, it is called the Pension Benefit Guarantee Corporation. That is all the UAW unions should have received. Instead Obama bought their votes for the indefinite future with the money of the remaining Americans.He is using the Americorp project to create a propaganda mill and train Acorn clones as community activists to further the Saul Alinsky, SDS, Bill Ayers, agenda.The government is spending to much money. They are not following prescribed legislative procedures. They are circumventing the bankruptcy laws by making an improper use of the 363 asset sale provisions. They claim it is a “stimulus” package, but very little of it is being spent for things in which the economy is depressed. Only about 25 percent has been spent to date. Most of it is being spent to implement social programs that will extend long into the future and saddle the states with ever larger mandatory entitlements.Some of the others, I am not sure what they are, but the facts are important to analyze anytime one makes a public policy decision.On the other hand if you are merely seeking to establish your reputation on the web, or attract a following by playing to the reader’s ignorance and congenital need to be outraged without reference to the merits, this works.Many of the other “bail outs” as he calls them should provide some substantial return to the government. Recall that all of the original Chrysler bailout money was recovered and the government made a profit. As to the others, which are unlikely to provide much in return like Freddie Mac, Fannie Mae and AIG, blame your elected representatives. They hounded the banks, Freddie and Fannie to make and guarantee the loans. When Brooksley Born, in her capacity as head of the Commodity Futures Trading Commission wanted to regulate credit default swaps, the door was slammed in her face. With CDS none of this could have happened. AIG, Lehman, Bear Stearns, Merrill Lynch, Goldman Sachs all issued millions of dollars in insurance against the risk of non-payment of the mortgage backed securities without any reserve requirements. The representatives of the people let them do it. When are the “people” going to take responsibility for their failure to vote wisely. You don’t have to understand the financial markets to do that, you just have to be able to tell the difference between an honest man a sociopath.I don’t think I could name more than ten public officer holders who I would classify as honest. Maybe if I did some research, we could find a few more. The fact is that for twenty or thirty years now the voters have become increasingly less concerned about whether their representatives were honest men and women. All they want to know is how this guys election will affect me. Will it raise my taxes or lower them. Will my entitlements increase or decrease.When Obama sought to appoint Geithner, a deliberate tax cheat, no one said a peep. All that anyone heard is that he is the “only one who can do the job.” The job he did was on the economy. The first time started to pull ahead of Obama in the polls, Geithner refused to grant bank holding company status to Lehman thus precipitating the crises. It was coming anyway, but Geithner made sure the timing was to Obama’s advantage.The chickens have come home to roost. Stop whining. Bite the bullet and do better next time.Integrity should be the first qualification to get your vote. If the guy isn’t honest, you have no idea where he stands on the issue. I think both John McCain and Ron Paul met that requirement. But the elites wanted Obama.This guy has no integrity. Why should anyone listen to him.As one comment indicated “This is Rubbish”

  12. duncan   June 22, 2009 at 6:34 am

    I assume these are inflation adjusted but in terms of their affordability it might be more relevant to look at them as % of GDP – the Iraq and Vietnam wars are similar in terms of their actual cost but the latter was in effect considerably more expensive because it ate up a greater proportion of GDP.