The Bailout - some comparisons
I’ve just looked at the proposed budget numbers for 2009 from the administration (see the summary tables at the bottom). Granted, this is a biased source, but I thought to look at the best case. I’m not looking at the fantasy numbers for future years. This administration’s never hit those numbers in the past, they’re just republican bedtime reading.
In 2008, the government expects to take in from taxes and other sources $2,521 billion. It expects to spend $2,931 billion. Clearly we’re in the hole $410 billion already this year. Since the bailout is expected to cost $700 billion, we can expect this year’s deficit, and the cumulative total debt to rise by $700 billion as well.
The bailout is an additional 24% of what the government had planning to spend this year.
That’s assuming that the cost is actually $700 billion and not higher. Do you ever remember a large government program that was under budget? We keep playing “whack a mole” in the words of the retired Dallas Fed bank chair. We don’t know what else was swept under the carpet on Wall Street.
We need assurances that it will be spent well, some oversight on where the funding goes, and some relief for non-Wall Street as well. The government has oversight when it lets a contract for a measly $100,000. Surely we can have oversight for $700 billion!