Tuesday, January 27, 2009

What It Costs You Personally to Bail Out the Banks

It's clear that the $700 billion TARP program won't be enough to bail out the financial system. Estimates of the total cost now run between $1 billion and as much as $4 billion. Let's cut it down the middle on the low side and assume the cost will be $2 trillion. There are around 300 million people in America. We'll guess that 200 million are taxpayers--kids and low income people don't pay federal income taxes. Divide $2 trillion by 200 million, and you'll find that your personal cost for bailing out the banks is $10,000. Of course, this is only a rough estimate, but it gives you an idea of what the bailout means to that person in the mirror. By contrast, the auto maker bailouts have, to date, cost about $125 per taxpayer. Even if we assume the total eventual cost of bailing out the auto companies triples, we're looking at $375 or so per taxpayer. In New York, home of Wall Street, it's not hard to spend $375 for dinner. Ask not what your country can do for you, ask whether you want to spend $10,000 to bail out the banks.

No comments: