March 6, 2015
Pox Americana: The Real Cost of Bailing Out Wall Street
Posted on Oct 4, 2009
By Matt Bivens, TomDispatch
This article was originally published by TomDispatch.
Introduction by Tom Engelhardt
With up to 61% of Americans, according to a recent poll, convinced that things are going badly indeed in Afghanistan and an official 9.8% of Americans unemployed, Congress is set to respond. This week, it’s slated to pass a $636 billion appropriations bill for the Pentagon that will include another $128 billion for our Afghan and Iraq Wars. Meanwhile, the president and his advisors are about to consider the latest plan by our Afghan War commander, General Stanley McChrystal, to gainfully employ up to 40,000 more Americans in Afghanistan.
By the way, as in the Bush years, all dollar figures associated with the Pentagon budget and our wars should be considered underestimates. Various military expenses like the upkeep of our nuclear arsenal aren’t even in that budget. Depending on who is doing the figuring, estimates of all U.S. defense-related expenditures—and this first budget of the Obama era is already larger than the last monster one from the Bush era—can run upwards of a trillion dollars. As for the war expenses, they invariably prove short of the mark and end up having to be supplemented.
When it comes to the Afghan War, this is practically guaranteed. Being prosecuted many thousands of miles from home over long, often embattled, supply lines, it is proving staggeringly expensive. According to one recent estimate, for instance, it costs more than $750,000 a year simply to keep a single U.S. soldier in the field, while the cost of delivering a single gallon of gas to the war zone is estimated at up to $100.
And then, don’t forget the Afghan army. Its U.S.-NATO upgrade program is already costing an estimated $8 billion a year and is clearly about to be expanded by the Obama administration. As the Afghan government is essentially poverty-stricken, that means its army is going to be U.S. property for years to come.
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Cure Millions of Leprosy—or Just Give Hank Paulson a Tax Break?
There are many possible responses to the news that we have committed more than four trillion public dollars to Wall Street.
Mine is a roar of admiration.
Four trillion dollars! Holy hell! I didn’t even know that was possible!
After all, the cost of World War II in inflation-adjusted dollars was $4 trillion. This bailout thing is just getting started, and already we’ve burned through that.
Without even noticing.
Certainly without rationing sugar or collecting scrap rubber or any of that nonsense.
Who’s the Greatest Generation now, baby?
Admit it. You feel it too. Just imagine someone snatching your laptop off a table and throwing it, Olympic-discus style, hundreds… and hundreds… and hundreds of feet. Sure, you’d be upset (and stuck with the bill). But however briefly, you’d feel admiration for the physical feat: Look at that thing fly!
So it goes with our bailouts, wild tax cuts, and war budgets. The money in play is staggering, but everyone acts like that’s something to mope about. Where’s the excitement?
Often, after reading an incomprehensible dollar figure, I’ll Google “What does a trillion dollars look like?” to get myself fired up. One example of where this takes you shows a million dollars (pathetic, wouldn’t fill a grocery bag), a billion (interesting, I could fit it in a truck), and then a trillion. (Wow, it spreads for acres! Look at that tiny human included for scale!)
It turns out that the United States can pick up that sort of weight and just smash it down on whatever the hell we want. Like Optimus Prime with giant square green paper fists. Slam! Slam!
Yet we’ve committed not one trillion dollars to the incompetent and/or corrupt, but more than four trillion dollars. That’s according to a report to Congress from special inspector general Neil Barofsky, the overseer of the bank bailout program.
Technically, Barofsky adds, Wall Street’s IOU to you and me is at about three trillion dollars these days, since some of it’s been paid back. Relieved? Don’t be. As these tsunamis of public wealth pour out, ignore the slosh and focus on the order of magnitude. The entire Gross Domestic Product—the number reflecting all wealth generated in this nation for this year—is only $14.1 trillion. So whether the sum of our money that’s now their money is $3 trillion (1/5th of all wealth generated in America in a year) or $4.7 trillion (1/3rd of all wealth generated in America in a year), it still means that, for a big chunk of the year, every single one of us was working for Goldman Sachs et al.
Barofsky’s report also suggests that Wall Street’s tab might ultimately work out to $24 trillion, which would be $80,000 per American, or $320,000 for a family of four. But that’s, like, totally the worst-case scenario. (Still, wouldn’t it be impressive? I envision huge, five-foot-cubed, shrink-wrapped pallets of dollars dropping from the sky onto my neighborhood, smashing houses, crushing cars, killing beloved pets, blasting craters into asphalt streets. Yeah!)
Smallpox and Bikinis
And yet could we employ this financial muscle in a more constructive way?
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