Nearly $10 Trillion Dollars Has Been Allocated By The US Government To Fight The Global Economic Crisis
$10 trillion dollars.
Bloomberg.com (link below) recently tallied up the costs (so far) that the United States government (and by extension, the people of the United States) has earmarked for deployment in its battle against the global financial meltdown.
The figure? Something just short of the $10 trillion dollar mark.
That's not a typo.
Let's put this into perspective.
The entire public debt of the United States passed $10 trillion dollars for the first time in late 2008. This is the debt that has built up during the time that the United States has existed as a country. For instance, the country owed $82 million dollars in 1800, $2.1 billion dollars in 1900 and $5.6 trillion dollars in 2000.
$10 trillion dollars worth of debt constitutes an annual interest payment of hundreds of billions of dollars for the United States government. To give you an example, the United States government allocated 9% of their TOTAL budget to pay off interest in their 2007 federal spending plan, and the debt has only continued to soar since then. Of the total $2.73 trillion dollar budget, nearly 10% was spent on servicing their debt. This was about half of what the country spent on Medicare/Medicaid and Defense spending, respectively.
According to Treasury.gov, $451,154,049,950.63 was the total interest expense paid out on all outstanding debt in 2008. That's a ridiculous, incomprehensible amount of money.
Let's get back to that $10 trillion dollar number.
As mentioned, this is all of the money that has been earmarked for the battle against the global financial meltdown. A good portion of this money has not yet been deployed, but you can assume that it eventually will be.
$10 trillion dollars divided by 300 million American citizens? $33,333.00.
Bloomberg points out that:
a) this is enough money to send a check for $1,430 to every single person in the world
b) this is 13 times what the United States government has spent on the wars in Iraq and Afghanistan combined
c) this is nearly enough money to pay off every home mortgage loan in the United States (90%)
Of course, the actual costs will be much higher in the long run, as the US government has to issue debt in order to cover these costs.
Anyone doubting that we might either be a) in a depression or b) nearing a depression needs to take a look at the amount of money that is being thrown at this problem. This is really unprecedented, and just another indication of how bad things are.
The big questions are:
1. Will all of this money help to solve the problem, or will it just make things worse?
2. How will the US government cope with this ever-increasing mountain of debt?
3. What will be the impact on the US dollar?
4. Will countries continue to buy up US debt?
5. What will the financial landscape look like 10 years from now? 20 years? 50 years?
Source: Bloomberg.com - U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs
Source: Treasury.gov - Interest Expense on Debt Outstanding
Filed under: The Economic Meltdown