Choose your statistics ...

[Smiles]

Putting things in pithy perspective:


The Globe & Mail
Steve Ladurantaye, today at 2:29 PM EST

You hear a lot about how much the U.S. bailout will cost, with most estimates putting the total cost in the trillions. Voltage Creative totalled the bailout's price tag at $4.6-trillion (U.S.), and created a graphic to show how the amount compares with other large, historic U.S. spending sprees. Each figure is adjusted for inflation.

The conclusion is impressive written out, but you really need to see the graphic to put it in perspective. The bailout will cost the U.S. as much as the Marshall Plan, Louisiana Purchase, a trip to the moon, the S&L crisis, the Korean War, the New Deal, the Iraq war, Vietnam and NASA's all-time budget combined. ( http://www.theglobeandmail.com/blogs/markets )


A graphic for the ages:

http://img.photobucket.com/albums/v18/sawatdeephotos/Personal/bailout-pie.png

Cheers ...

Well, Smiles, one way of looking at it would be to question the statistics: did the S & L crisis really cost 256 billion, or was it nearer 124? Was Vietnam 698 (and does that include veterans care, etc) or was it somewhere between 140 and 584?

I have absolutely no idea, but another way of looking at it would be the alternative to not spending the money - as well as what would have been the outcome of not spending the money on some of the other "Large Government Projects". I can't help thinking that in some cases it simply would have been money saved.

[cottmann]

One set of interesting statistics that has just emerged is that from the US National Bureau of Economic Research. The NBER is the organization that says whether or not the US is in recession, and its latest report states that its Business Cycle Dating Committee determined that the US entered recession in December 2007. Repeat, December 2007.

Things are obviously worse than anyone imagined.

See CNN Money News for details.

the US government don't have a problem in printing the money, the more money they need, the more they print, and they don't have any problem in selling their dollars.

Less than a trillion yesterday
700 to 900 Billion more today (DOUBLED)
plus 500 to 700 billion as soon as this horrible year is finally completely over (on January 20, 2009)
8.5 Trillion soon

Moore's Law on the deficit. Will the drinkable water and breatheable air run out first? What was that fella's name?

Mooney makes the world go 'round.

Where is Grordon Brown?

More debt. Keep lowering interest rates so that bad debt can continue to be easier to get. That makes sense to me.

Hmmmm, I can think of two governments that need to be told to get their acts together at least in respects to where it affects the rset of the world.

I sure hope the next US President is better at being a baseball team manager than the last one.

JMO


Economic rescue could cost $8.5 trillion
Heavy spending to battle the financial crisis is unlikely to abate soon. Analysts say next year's deficit could top $1 trillion.
November 30, 2008

latimes.com/business/la-fi-pricetag30-2008nov30,0,7549258.story


Reporting from Washington -- With its decision last week to pump an additional $1 trillion into the financial crisis, the government eliminated any doubt that the nation is on a wartime footing in the battle to shore up the economy. The strategy now -- and in the coming Obama administration -- is essentially the win-at-any-cost approach previously adopted only to wage a major war.

And that means no hesitation in pledging to spend previously almost unimaginable sums of money and running up federal budget deficits on a scale not seen since World War II.

Indeed, analysts warn that the nation's next financial crisis could come from the staggering cost of battling the current one.

Just last week, new initiatives added $600 billion to lower mortgage rates, $200 billion to stimulate consumer loans and nearly $300 billion to steady Citigroup, the banking conglomerate. That pushed the potential long-term cost of the government's varied economic rescue initiatives, including direct loans and loan guarantees, to an estimated total of $8.5 trillion -- half of the entire economic output of the U.S. this year.

Nor has the cash register stopped ringing. President-elect Barack Obama and congressional Democrats are expected to enact a stimulus package of $500 billion to $700 billion soon after he takes office in January.

The spending already has had a dramatic effect on the federal budget deficit, which soared to a record $455 billion last year and began the 2009 fiscal year with an amazing $237-billion deficit for October alone. Analysts say next year's budget deficit could easily bust the $1-trillion barrier.

"I didn't think we'd see that for a long time," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "There's a huge risk of another economic crisis, a debt crisis, once we get on the other side of this one."

But the Bush administration and the economic team that Obama is rapidly assembling like a war Cabinet are vowing to spend whatever it takes to avoid a depression; they'll worry about the effect later.

"I don't think that there's any way of denying the fact that my first priority and my first job is to get us on the path of economic recovery, to create 2.5 million jobs, to provide relief to middle-class families," Obama told reporters last week.

"But as soon as the recovery is well underway, then we've got to set up a long-term plan to reduce the structural deficit and make sure that we're not leaving a mountain of debt for the next generation."

The mountain is already there, and rising faster than at any time since the 1940s, when the United States was fighting a global war.

Analysts say the current flood of red ink calls into question Obama's ability to launch programs such as middle-class tax cuts and a healthcare overhaul. In 1993, a deficit only a third the size of next year's projected $1 trillion prompted President Clinton to abandoned his campaign pledges of tax cuts.

Once the financial crisis eases, higher interest rates and soaring inflation will be risks. If they materialize, they could dramatically increase the government's borrowing costs to meet its annual debt payments. For consumers, borrowing could become more expensive even as the price of everyday items rise, holding back economic growth.

"We could have a super sub-prime crisis associated with the meltdown of the federal government," warned David Walker, president of the Peter G. Peterson Foundation and former head of the Government Accountability Office.

But even deficit hawks such as Walker acknowledge that the immediate crisis is priority No. 1. Just as with World War II, the government can worry about paying the bills once the enemy is defeated.

"You just throw everything you have at the problem to try to fix it as quickly as you can," said David Stowell, a finance professor at Northwestern University's Kellogg School of Management. "We're mortgaging our future to a certain extent, but we're trying to do things that give us a future."

Washington could wind up spending substantially less than the sum of the commitments. Though the total estimated cost of the government's efforts adds up to $8.5 trillion, only about $3.2 trillion has been tapped, according to an analysis by Bloomberg.

And not all the money committed is direct spending. About $5.5 trillion in loan guarantees and other financial backing by the Federal Reserve is included in the total.

"The only way those commitments would become obligations would be if the economy completely collapsed, in which case it's a whole new ballgame anyway," said John Steele Gordon, a business and economic historian.

The government even stands to make money on some expenditures, such as the $330 billion it has used to buy equity in banks and other financial institutions through the Treasury Department's Troubled Asset Relief Program.

Moore's Law on the deficit.



Perhaps I'm taking you too seriously on this but my understanding is that the root of Moore's Law relates to the number of transistors or functionally similar device that can be placed at low cost onto a carrier e.g. pcb or chip. Moore's Law was preceded by Grosch's Law and in his later years Herb Grosch toured the dinner speaker circuit admitting that it was self-fulfilling because it had been IBM's pricing policy for mainframes and as the dominant supplier of mainframes everybody else's pricing policy followed it.

Claims for Moore's Law are that it is reflected in many ancillary technology price but if it links to "the deficit" the link is difficult to explain. Do you have a candidate explanation?

"the deficit" the link is difficult to explain. Do you have a candidate explanation?

No link but inferring that the deficit would now grow exponentionaly in dollars (yikes!) as per "Moore's Law"


Moore's law
From Wikipedia, the free encyclopedia

... the number of transistors that can be placed {inexpensively} on an integrated circuit has increased exponentially, doubling approximately every two years.

Yes, you are right in that Moore's law more applies to exponential growth in placing transistors INEXPENSIVELY, and that is not a word that applies to a deficit (it's EXPENSIVE!).

Well, what you are really saying is that there it is an exponential pattern like that observed by Moore vis-a-vis the reducing cost of mips (microprocessor instructions per second). You are not really suggesting that there is a link. In fact Moore is pointing to a reduction in cost whereas the deficit is a growing liability so the growths are in opposite directions.