One of the big questions that many people — including myself on CNN Money — have been asking is this one: How much would we get if the bailout went to taxpayers instead of banks? We’re funding this bailout, so it is no surprise that people are getting a little anxious about who is getting this money. And how they’re using it. So, here is the answer that CNN Money came up with:
To arrive at that figure, CNNMoney.com took the total of the bank bailout, $700 billion, and added that to the proposed stimulus spending in the House of Representatives bill, $819 billion. That totals $1.519 trillion.
We then divide that number by 156.3 million, which was the total number of U.S. filers in 2008.
So: $1.519 trillion divided by 156.3 million equals $9,718.49 per U.S. taxpayer.
Now, this figure only includes the latest two large economic stimulus bills (the one in Congress now and TARP passed last autumn). The real number spent on economic stimulus measures so far — most of it benefiting banks and some of it going to pay for executive bonuses and perks — is something right around $7.2 trillion. And that’s without the economic stimulus bill currently being considered. So, with a little quick and sloppy math, you can take that $9,718.49 and multiply it by seven and get pretty close with this estimate: If all of the economic stimulus spent so far had been giving to taxpayers, each would get right around $68,000.
How much could you do with $68,000? You could pay down debt, set money aside for savings, and do some consumer spending. (Of course, part of that stimulus is the money from the tax rebate received, so I suppose you can subtract the money you got last spring from the total.) The benefit increases in number slightly if you look at households instead of taxpayers: According to the Census Bureau, there are about 126 million households (as opposed to 156 million taxpayers).
What’s the excuse for not splitting the money amongst taxpayers?
Even though it is obviously too late to recall the trillions spent already, close to $10,000 would be quite helpful. But we won’t get it. CNN Money also answered the question regarding why taxpayers will be lucky to see only the possible tax cut included in the current economic stimulus bill:
But the government is looking to have that money get spent and to have it multiplied somehow. Our economy is based on people spending money. So people saving money doesn’t help.
And there you have it: Instead of helping us completely makeover the economy, our leaders are set on keeping the current model of growth through (unsustainable) debt-fueld consumer spending. Personally, I find it heartening that more Americans are becoming interested in saving. Also, it is worth noting that paying down your debt isn’t any more helpful to the economy, either. Although I contend that if more Americans were able to pay down debt, it would prevent some banking problems through fewer defaults. It’s sort of a trickle up effect.
Of course, just giving us all between $15,000 and $50,000 apiece to begin with would have been cheaper. We could have paid down credit cards, made a big enough mortgage payments to qualify for refinancing and loan modifications, and maybe even bought cars (you know, a couple thousand down and then 72-month financing). All of this would have freed up all sorts of resources for us to be spending again — just like the government wants.
Now, don’t get me wrong: I’m not a big fan of any bailout. But I do wonder if — since the money is going to be spent anyway — it would be less wasted coming back to us rather than going to fat cats.
What do you think? Should the bailout money be given to taxpayers?