President Bush has grudgingly allowed General Motors and Chrysler to drive away with the last few billion bucks in Treasury’s TARP till, which boasted $350 billion a mere 77 days ago.
How did it all slip away so fast?
How to spend $350 billion in 77 days
Posted in * Economics, Politics, Credit Markets, Economy, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Politics in General, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Possibility of a Bailout for the U.S. Auto Industry, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package
$350,000,000,000
“The average principal amount owed on a mortgage is $69,227. Nearly 14 million homeowners, about 19% of all homeowners in the country, owe more than $100,000.” Source: http://moneycentral.msn.com/content/SavingandDebt/P70741.asp
So, for ease of math and understanding, let’s use $100,000. Just remember that the average mortgage is actually only about 2/3rds of that.
So, how many $100,000 mortgages would $350,000,000,000 pay off?
It would pay off 3,500,000 mortgages of $100,000. That’s a lot, but it still seems hard to get my head around.
If we were to pay off one of the 3.5 Million $100,000 mortgages per day, it would of course take 3.5 Million days. How many years is that? It would take us 9,589 years to spend all the money, paying off a $100,000 mortgage every single day of the year. That is still too hard to wrap my head around. I am a bear of very little brain.
What if we were to walk into a neighborhood of say 50 houses every single day and pay off all 50 mortgages of $100,000? We could pay off an entire neighborhood of 50 mortgages per day every single day, for the next 191 years! How many per day could we pay off if we decided to pay them off in just 30 years? We could pay off an entire neighborhood of 318 mortgages per day, every single day, for the next 30 years.
Of course, the average mortgage is only $69,227. $350,000,000,000 would pay off 5,052,181 mortgages. If we paid off one average mortgage per day, it would take 13,841 years to spend all the money, paying off one average mortgage per day.
That money could pay off 461 average mortgages per day, every single day of the year, for the next THIRTY YEARS!!!
Of course…$350 Billion is only about 1/3 of the Trillion Dollar bail out.
The whole bailout package could have paid off ONE THOUSAND THREE HUNDRED AND EIGHTY FOUR average mortgages per day, every day of the year, for the next 30 years.
People should be in jail.
If the problem is the sub-prime mortgages, would it not be cheaper to simply use tax payer money to pay them off or at least enough so that the borrowers can resume realistic payments?
I have often discribed the relationships between different parts of government as “fiscal incest”.
How much more evidence do I need to prove this reality?
Don
How indeed!
[i] How did it all slip away so fast? [/i]
In bailouts, as in other things, it’s hard to be just a little pregnant.
As that great philosopher, Sally (from “Peanutsâ€), once said, “All I want is what’s coming to me. All I want is my fair share!”