Funny how the whingeing in the last few years about all the money we're spending in Iraq sort of pales in comparison to the costs of the financial bailouts. In fact, everything pales; this is the largest sum of money spent in American history. Wall Street analyst Barry Ritholtz crunches the numbers: the combined financial bailouts of the last two months are costing more than the (inflation-adjusted values of the) Louisiana Purchase, New Deal, Marshall Plan, Korean War, Vietnam War, Iraq War, and the entire history of NASA combined.
4 comments:
I was thinking the exact same thing.
I think the vast majority of money being spent on the bailout is money poorly spent. We should've gotten a much better deal in terms of equity in Citi, and in general addressed the problem of moral hazard in a more direct way.
However, from the perspective of a war critic, you must remember that the argument is that it is unnecessarily wasteful and expensive - not that it's just expensive. $2000 rims for a car is a waste; $200,000 for chemotherapy is not.
We can argue about the relative wisdom or necessity of various expenditures, but there's so much more going on than raw cost alone. Not to mention that money spent in Iraq is less likely to post any kind of financial return on investment.
Plus, some of it depends on what dollar value you'd place on intangibles like human life (whether US Military, US Civilian, Allied military, Allied Civilian, or the entire spectrum of local/third party personnel and their relationships to the United States).
Finally, it also depends on whose estimate for the cost of the Iraq war, and the bailout you use - and whether we're done spending money on either (the answer is no, but it's truly a question of how much more we'll have to spend).
I think the number of comments I leave on your blog is rapidly approaching the number of posts I make on mine.
You're right to point out that the total amount of money is irrelevant if it's being well-spent and actually does what it's intended to do. This gets difficult because in both the bailout and the Iraq war, it's pretty difficult to get any sort of estimate of the costs of inaction averted. As you point out, war is particularly difficult to value because you're also considering the costs of all sorts of non-monetary concerns, both the "cost" of human lives "spent", but also the long-term potential value of strategic gains (or losses). It'll take a generation to see the follow-on effects that we can't foresee now. On the other hand, we can most certainly point out specific instances of egregious waste in both cases, and boy are there a lot of them.
Despite all that, I do think the raw comparison is at least worth pointing out, in light of how vociferously people have quoted the raw cost of the Iraq war as if it were an argument in itself.
The bailout, at least how it was originally cast, was at least based upon prior history--the savings and loan scandal--which helped fuel, ironically, the great economy of the nineties. They were following a blueprint that worked before really well. Unfortunately, this time it is so much more widespread and deep.
Your putting into the perspective of other "expensive activities" of the nation is helpful. I plan on using it.
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