Economic Stimulus Update: How Much Has Been Spent on Bailouts?
February 24, 2009 by Miranda Marquit
Filed under Finance
Every so often, CNN Money releases a handy visual showing how much money has been devoted to “economic stimulus” — starting from December 2007 when the hapless efforts to avoid recession began. I like to post it here. As you can see, so far more than $11 trillion has been promised for economic stimulus efforts. Kind of makes the recently passed $789 billion look pretty paltry. I’ve been saying it for months: Most of our economic stimulus spending is not being passed in large packages. Most of it is adding up with $100 million here and $1 billion there. Also, look who the biggest beneficiaries are. Ben Bernanke has been vowing to help the banks, and the government certainly has been throwing plenty of money at them.
What do you think of these economic stimulus efforts, and where the money is going?
Although we have not seen a lot of discussion around TALF yet, I think that is the next thing to come under intense debate in the next few days.
Unfortunately, I’m not sure how much public discussion any of this other stuff will be getting. How attention did most of the other economic stimulus measures get? Out of the $11 trillion spent, I think that there was only really public scrutiny of maybe $2 or $3 trillion.
Numbers even more frightening than the proposed Obama budget. The two deficits added together are truly staggering. Almost beyond comprehension. I feel sorry for my kids and grandkids. Their future earnings have already been spent.
Oh yeah. Just the stuff spent before Obama came into office is staggering. And eclipses almost anything he’ll do going forward.
I’m just an ordinary Mom. But I know enough about keeping a family fed on one paycheck. Putting money aside for emergencies and trying to save save save.
My thoughts about the bail outs… Every company that has received or expects to receive bail out money should be willing to:
#1 Fire the current CEO he’s obviously not doing his job.
#2 Stop all bonuses of any kind to anyone. If your company is in financial trouble no one could have been performing above and beyond.
#3 Fine tune your salaried management, there’s a lot of wasted and double effort jobs that can be done without.
#4 Instead of cutting your hourly workforce and shutting down production, have a manatory 2% pay cut across the board for everyone from the CEO to the lowest paid stock boy. I’d rather take a solid 2% cut in pay than lose my job or watch my neighbor lose his. And once the lay offs start possibly lose my job altogether because of closing the plant. I wonder how much money it would actually add up to with just a 2% cut in every employee at GM and I mean every employee. Multiply that savings by all the banks, financial institutions and companies that have already gotten bail out money… please.
Interesting proposals. I agree that once you accept public money, you can’t keep with “business as usual.” Although I’d probably do a 7% pay cut for CEOs and 2% for everyone else. After all, CEOs get disproportionate rewards during the good times; they should get bigger consequences during the bad times.
Your idea of the extra 5% for the CEO’s would be that much more we could be saving… Nothing of what I stated is impossible or not doable. The problem is no one seems to want to take any responsibility. I recently offered to take a pay cut of 20% to help out the small company I work for. And believe me, I can use that 20%. My little salary will still be more than unemployment.
Everyone that can keep a job, even at a salary reduction, not only saves the reduced salary, but they save all the unemployment benefits as well. Not to mention your dignity!
11.5 trillion.
Ok, lets see, one thing that hurt the economy… Banks loaned out so much money and did have have sufficient reserves on hand, they lent out money to people who likely shouldn’t of got any or income was not good enough to pay back the high payments every month.
So we give them MORE money and expect them to loan out money again, basically, the same thing they did before that caused this mess and to our surprise, well, the surprise of the government it seems, the banks of course didn’t do that. I don’t blame them.
11.5 trillion…
Ok, I think only two things would work, at least right away.
1) and I think the best idea, take that 11.5 trillion, divide that between every taxpaying and working American or unemployed who lost there job and were laid off and give them that money. A rough guess I did (not completely accurate, just a guesstimate) is 11.5 trillion, divide by 225 million (over 225 million Americans over the age of 18, not all are working or trying to work of course, so number of those working or looking for jobs is smaller I am sure) comes to a little over $51,000 a person.
Give each tax paying, working American or those who were working, lost there job, and are looking for a job that money. For a lot it’ll be more then they make in a year, they can use that for there own education costs or that of there kids, vacation, repairs on a house or car, buying a car, a big down payment on a house, pay bills, shopping spree, etc. all of which helps the economy, keeps money flowing and keeps people working. Maybe a problem would be people blowing a lot of the money or not spending it so the economy would see a good spike that would fall off in 6 months or so, then split it up into payments, like, say $500 or $1000 a month, it’s not one large sum but enough that people can use it to maybe pay some bills and spend a little on other things. Possibly allocate those payments to go straight to a new car payment every month, etc.
If not, my 2nd idea…
Start a huge federal funded public works program. Use that money to higher people who have lost jobs and are looking for jobs, give them training, send them out to fix, say, roads, at least here in Southern CA the roads are horrible, when that is done, find another project, all the while trying to help them find jobs outside the program. A problem I see is people wanting to stay in it forever, maybe set a timetable, they have 18 months max in the program and they get assistance to find a new job while in the program.
Those are just my ideas. I am no expert and I am sure there are LOTS of holes in both my ideas but it’s something, I think both are at least better ideas then the government has.
Obama has surely stuck his foot in his mouth. What are we going to when the dollar collapses?
11.5 trillion allocated to economic recovery. Economic recovery for whom? Washington has been given a hammer and now thinks everything is a nail!
If this administration were serious about getting cash flowing, it would reset all consumer debt to 0, and let Americans benefit from a personal economic stimulus? Just think about the disposable income that could be returned to the hands of the taxpayers! At the flick of a few computer keys, debt canceled.
I just read a financial report that estimated consumer debt at just over TWO trillion. The banks have gotten their haul and paid out big bonuses, let them take it on the cuff! They have a debt to pay, let them do it! Credit cards companies are crushing consumers. I have excellent credit, never late paying credit card payments, but I got sucker punched recently. I had ONE credit card with a low interest rate, and I was notified that the interest rate would almost double–not because I wasn’t paying the bill on time, but rather because it was no longer “profitable” at the interest rate I had. The only way I could keep the low interest rate to finish paying off the balance was to close the card. I did that, but wasn’t told that closing my card would lower my credit score by 75 points! I have never been late, so I can only imagine what is happening to those who are struggling without jobs and are losing their homes. This insanity must stop!
It is really interesting that the government can allocated 11.5 trillion dollars in bailouts without making any difference in the economic situation. Let’s look at the causation of the current situation. The people who run these large corporations started some poor business practices and ran their companies into deep debt.
I also find it disconcerting that our politicians cannot perform simple arithmetic operations. $11,5 trillion divided by 140 million taxpaying citizens = $82,000. If Joe Citizen were to receive $82,000, he would pay off all of his debt and would pump the surplus into the economy through purchases of new items.
This would relieve the banking industry from their heavy debt burden. The auto makers would not be going bankrupt, etc., and the economic emergency that currently grips this country would simply disappear.
If the government had passed out $60,000.00 to EVERY person on the 2008 census over the age of 18 it would have spent a TOTAL of $13.8 trillion dollars. A little less than it has spent to date but what do you think the individual who got this $60,000.00 would have done with it?
Put it in the banks? Spent some of it on “foolish” things? PAID their debts? Paid their mortgage?
Where do you think our economy would be today had the government really been FOR THE PEOPLE!!!!!
We nned to elect people who benefit you and me not JUST themselves and their friends!!!
Own everything you can.
As an individual, own your home, your auto, and have no credit card debt.
Contribute the maximum to your 401K plan.
Check your 401K on a monthly basis.
I’m a Conservative.
If you own everything you have, the government loses!
!!
Over 11 Trillion earmarked & counting ! I heard some math wizard crunched the numbers and said “If they would give this Economic Stimulus money to American Homeowners instead of the “BANKS” to pay-off their mortgages… The Banks would still get a flood of money, those Tax-Payers who’ll end-up paying for this in the end will have gotten something in return…A mortgage-free home !” Just think how much more money the “Banks” will recieve when Homeowners are able to pay-off their Credit Card Debt or purchase American made New Cars because of the extra money they’ll have since they don’t pay mortgage payments each month ! Now that’s what I call an Economic Stimulus Package !
So……….
If the government had done the “right thing” – and instead of giving all this money to the companies…. had given every taxpaying Adult in the US a large tax-free check, lets say $100,000, requiring the taxpaying adult to spend this check within a five year period of time (easily done, issue debit cards like unemployment insurance in several States… if the money sits there it goes away, require statements on your tax returns for those five years detailing what you spent it on) – in so doing, forcing the companies, banks etc to WORK for their income…. we would not have a recession and yet spent the same amount of money earmarked for these bailouts…. we would not have unemployment at these levels because people would be spending the money and employers would be hiring. And most important of all – the CITIZENS of this Nation would have benefited…. not the businesses.
Yet, they did not do that.
How many times have we heard recently of incidents where our government did not take action when they knew of issues, fraud etc? Take mr madoff as a prime example. The SEC knew about him for ten (10) years yet did nothing…. this only came out after he was arrested.
The gentleman who was trying to tell the SEC of the fraud for ten years wrote a book, in a video this morning his advise? “Don’t trust your government”
Where else have we heard similar statements made recently?
The works project is included in the recent economic stimulus bill. I agree that it’s a good way to spend money. I think our priorities have been messed up. I like the idea of giving money to taxpayers and having them pay off their consumer debt and/or contribute to loan modification. Those who don’t have those issues could invest. That way, the effects of inflation are minimized, the banks clear off some of their bad assets and free up capital, and everyone gets in a better place.