(brought to you by FromDC2Iowa.blogspot.com*)
When President Obama explains the "State of the Union" to Congress and the rest of us this evening, presumably he'll have something to say about the $1.4 trillion deficit in his budget that will be added onto the national debt.
Even for those who know that, mathematically, a "trillion" is a million million -- a one with 12 trailing zeros -- it's hard to get our heads around any other-than-mathematical meaning.
We need more than counting zeros; we need to know "what does a trillion dollars look like?"
Nomi Prins and Mother Jones magazine have made an effort to help us understand. Prins' book is It Takes a Pillage, Nomi Prins, It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to Wall Street (Wiley, 2009).
In the January-February issue of Mother Jones she offers us the graphics that show the relative size of the giveaways from U.S. taxpayers to the banks that total $14.4 trillion dollars -- $7.2 trillion, each, by way of the U.S. Treasury and the Federal Reserve Bank. Nomi Prins, "The Real Size of the Bailout," Mother Jones, January-February 2010. And see, "Behind the Real Size of the Bailout," Mother Jones, January-February 2010.
She's created a very revealing set of numbers, comparisons and totals.
But what really drives the point home is the piece by Mother Jones' Marian Wang. It's a creative effort at researching and revealing what is perhaps the most dramatic example I've ever seen of the meaning of "opportunity cost."
(If you're not yet familiar with that term, it's economists' talk for the experience of having too much month at the end of the money; that money spent on one thing means you have denied yourself the ability, the "opportunity," to acquire something else. Thus, the "cost" of the car may be $15,000; but the "opportunity cost" of the car is that you now cannot afford to drive it anywhere, including that vacation you'd been dreaming about.)
So what has been the "opportunity cost" of handing over $14.4 trillion dollars to impoverished bankers? What else might we have done with that money?
Here's Marian Wang's list. Marian Wang, "12 Better Uses for the Bailout Bucks; Vaccinate kids, fix poverty, buy the world an iPhone. And that's just a start.," Mother Jones, January-February 2010. (If you're not familiar with Mother Jones, but would like to support its work, here's the link.)
10 years of vaccines for kids in 117 countries: $110 billionIn case you missed it, that's not a list of things, any one of which we could have done with $14 trillion. That's a list of things all of which we could have done with $14 trillion. That, my friends, is one whopping big "opportunity cost" that comes with handing over taxpayers' money to an Administration's banker friends.
10 years of $10,000 bonuses for all US public school teachers: $318 billion
Sending all 2009 US high school grads to private college: $347 billion
Doubling US spending on HIV/AIDS and cancer research for 20 years: $493 billion
10 years of CO2 offsets for all Americans: $559 billion
Meeting UN anti-poverty goals by 2015: $757 billion
20 years of universal preschool in US: $860 billion
Buying a house for every homeless American: $878 billion
10 years of helping developing countries deal with the effects of climate change: $2 trillion
Buying the world an iPhone 3GS: $2 trillion
10 years of private health insurance for uninsured Americans: $2.2 trillion
Paying off 1/3 of US home mortgages: $3.5 trillion
Total: $14 trillion
[Credit to Sherman Johnson for bringing to my attention the Johnson County Supervisor Rod Sullivan "Salvos" item about this. Though I'm on the Salvos subscription list, for some reason this one didn't arrive.]
You can do a similar opportunity cost analysis with the projected $1.4 trillion deficit in this year's budget, the $1 trillion already projected for next year, the $14 trillion current federal debt, or the $100 trillion of currently unfunded future federal obligations. (Don't forget the distinction between "deficit" and "debt;" see, “’Debt?’ ‘Deficit?’ What’s the Difference?” Concord Coalition, May 1996.)
And you can also divide any one of these numbers by 300 million to determine each American's share (e.g., for $14 trillion it's $47,000 of additional debt for each of us, every man woman and child -- unless we either declare the United States to be bankrupt and default on all our domestic and global obligations, or so devalue the dollar (and suffer inflation) that the pain is the equivalent of paying off $47,000 in debt).
This is a shell-and-pea game. The State of the Union event, which will get disproportionate play in the media tomorrow, is but a diversion.
The real story for tomorrow's papers? Today's Congressional investigation of the roles of Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner in creating this unconscionable disaster -- including the pass-through of billions from taxpayers to Treasury to AIG to Goldman Sachs, paying this former employer of so many of President Obama's team (as well as President Bush's Treasury Secretary Henry Paulson) 100 cents on the dollar when previous settlements had been arranged for 14 cents on the dollar, and then keeping the whole thing secret from the American people. Gretchen Morganson and Louise Story, "Two at Fed Had Doubts Over Payout by A.I.G.," New York Times, January 27, 2010, p. B1; Mary Williams Walsh, "Audit Faults New York Fed in A.I.G. Bailout," New York Times, November 17, 2009, p. B1. From the Times report at 3:36 this afternoon, it looks like many of the committee members of the House Committee on oversight and Government Reform shared my sense of outrage. Mary Williams Walsh and Sewell Chan, "Under Fire, Geithner Says A.I.G. Rescue Was Essential," New York Times, January 27, 2010.
And for my predictions a year ago of the problems that would flow from President Obama's capitulations to Wall Street, see "Obama's Potential Wall Street Downfall," April 12, 2009, with its links to 43 additional blog entries on related subjects going back to September 5, 2008.
The President has been lobbying for Bernanke to get another term [Edmund L. Andrews, "Obama to Nominate Bernanke to 2nd Term at Fed," New York Times, August 25, 2009, p. B1] and has said nothing really critical of the insider performance of Treasury Secretary Geithner.
Will he tonight? What do you think?
But at least, my taxpaying friends, you now know "what $14.4 trillion looks like."
_______________
* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source, even if I have to embed it myself. -- Nicholas Johnson
No comments:
Post a Comment