Infographic: all US one-time expenditures vs the bailout

Discuss

76 Responses to “Infographic: all US one-time expenditures vs the bailout”

  1. allennoble says:

    If these figures have been normalized to 2009 dollars then they are truly scary. If they are in historical dollars then the Louisiana Purchase is probably the most frightening of all.

    BTW does the Marshall Plan include the rest of WWII costs? otherwise you should probably have said fixing up defeated WW2 nations rather than just WW2.

  2. SamSam says:

    Most of this doesn’t make sense, because several of those boxes on the left are either loans, or appear to be sized by the amount of loans that they could give.

    For instance, the TALF, the second biggest square there at the bottom, is a program specifically for giving loans to small businesses (something that half the BB readers were complaining that the gov’t wasn’t doing). It is authorized to give up to $1T in loans at relatively low interest.

    If your community savings bank loans you a thousand dollars, that doesn’t go into their expenditures column….

    How one can possible compare potential loans to small-businesses as an “expenditure” of the same degree as the Iraq War or the race to the moon is completely beyond me, but I guess people like graphics that appear to prove a point.

  3. cosanostradamus says:

    .
    It’s only Monopoly money, now.
    .

  4. laderoda says:

    If you go to the site, there’s a post that notes that the value of the historical events are “inflation adjusted”. For example, the Louisiana Purchase was $15 million; the inflation-adjusted value is $297 billion, which is what’s shown in the graphic.

  5. gpeare says:

    WWII missing. Why? How would that change the analysis?

  6. Anonymous says:

    These figures haven’t been normalized to 2009 dollars, so the comparison itself is misleading.

    The island of Manhattan, after all, cost only $12 worth of beads to purchase from the Iroquois.

    You’re also including money that has been lent (not expended), such as the Commercial Paper Funding Facility. That facility doesn’t represent the expenditure of any money. That money has been lent to investors and secured by assets and represents income to the Federal Reserve.

    We’re definitely spending a lot of money we don’t have, but this chart doesn’t demonstrate it accurately.

  7. Anonymous says:

    Hi, this is the Anonymous at #24, 7:25 AM again. People like me aren’t trying to minimize the bailout figures, which are huge. It’s just that they could STILL be shown to be huge with an accurate graphic, and this one is misleading.

    Never mind, for the moment, whether it’s difficult to compare areas or whether it’s clear how the two stacks should be compared. The main problem is that the quote says WWII is included and Cory’s headline says “all US one-time expenditures,” but that’s not the case. Others pointed out, as I did, that the Civil War, WWI, and WWII are missing, among other one-time events within the 206-year time frame.

    Just shorten the time frame on the right side, and include ALL major one-time expenditures within that time frame, comparing 12 months vs., say, 50 to 100 years, and you’ll have a much more valid comparison that is still impressive. Why not use 60 years? You could legitimately leave out WWII and earlier events that way. And the bailout side will probably still be much larger.

    THEN the debate can turn to comparing areas when it may look like a comparison of heights, and/or the differences in expenditures vs. guarantees vs. “investments.”

    But first, the graphic has to actually represent what it claims to represent.

  8. Anonymous says:

    Where are the two World Wars? One source says WWII cost $306 billion, and Lend-Lease $50 billion. Inflation since 1945 is more than 10 times – over 1000% – so we’re talking trillions of dollars that don’t show up on this graphic.

  9. Lester says:

    I’d rather another Apollo program than, say, AIG.

  10. Vizcacha says:

    #41 “As I noted in #36, that is less than 5% annual inflation. I’m not sure I believe The Inflation Calculator, as it implies significant deflation through the 19th century (e.g. 1803-1903, $1.00 becomes $0.60), but I couldn’t find the data pre-1913 in The 2009 Statistical Abstract. Average inflation from 1913-2007, that $21 you cite, is about 3.3%.”

    It’s possible to find estimates of inflation for the 19th century. They show stable if not declining prices for most of the period; nothing near the 3% range.

    #42 “No, WWII not being on there has nothing to do with anything.”

    Except that Barry Ritholz specifically claimed the recent expenditures have been larger than all the one-time expenditures in US history “including WW2.”

  11. subliminati says:

    Infographic?!?! The “info” seems suspect, and the “graphic” is an unaesthetic cluster fuck of ugly.

    Interesting concept, horrible execution. This = Fail.

  12. Big Ed Dunkel says:

    Put a little of that bailout money on the Mets plus 3 at Philly. Come on! It’s a lock!

  13. Anonymous says:

    Even this chart does not cover all the costs the current government has spent in expenditures. The chart only show financial-related expenditures. Where are the billions going into “stimulus” activities or to GM and Chrysler and the continuing costs of the Iraq and Afganistan wars?

  14. Anonymous says:

    Since a lot of those blocks on the left of the diagram are ‘facilities’ I wonder whether this is a sensible comparison.

    Many of the facilities are effectively providing liquidity to the market, allowing banks and other institutions to borrow from the government rather than each other. This is not money that is being ‘spent’.

    Since these are short-term (in some borrowings, overnight and repaid the next day) the amounts are moneys the government will mostly expect to see repaid aren’t they? Even if losses are made, they will never amount to the full value of the facilities.

    As such(and if I understand correctly) these ‘facilities’ are very different from the moneys that the government has ‘spent’ to bailout AIG, Bear Stearns etc. This spending might usefully be compared to spending on past wars or other programmes.

  15. Anonymous says:

    You guys are screwed. Hope we don’t go down with you.

  16. travelina says:

    This is the first useful infographic I’ve seen on the bailout. Thanks for posting.

  17. teufelsdroch says:

    sublim, your talents are wasted here. youtube needs your work far more than boingboing. if you concentrate your efforts there, i’m sure it will lead to fame and glory.

    godspeed.

  18. PJDK says:

    A lot of that is in the form of guarantees don’t forget. Most of this is liablities, compared to something like WWII which is actual physical spending. If you cross your fingers and say a prayer some countries might even come out the other side of this in profit as Sweden did in the 90s.

  19. Anonymous says:

    How much of that bailout is actually expenditures vs. things like loan guarantees? If they’re just lines of credit that aren’t guaranteed to be defaulted on, then it’s not really a valid comparison- that’s like saying that giving out an interest free load for 100M that you repay in a year cost 100M rather than just the cost of the interest (which at current government bond rates is a very low percentage.)

  20. Anonymous says:

    > For example, the Louisiana Purchase was $15;
    > the inflation-adjusted value is $297
    > billion

    gee, maybe we can sell it back to France.. that would pay for the bailouts!

  21. Anonymous says:

    In terms of an info graphic, it’s not really that good.
    It does not make itself instantaneously clear.

    It’s good to have a graphic compare the two.

    Why are the both sides the same color? What’s the $50B dot in the middle? Where the ‘VS’ in versus, to say hey compare this to that. Why is a graphic that supposed to be showing time scale not on a scaled time line?

  22. Ugly Canuck says:

    The Iraq item is still on the grow.

    Also, there’s no accounting here for the opportunity costs of the Vietnam & Iraq Wars (not to mention the increase in oil prices, baked in by the latter policy).

    http://en.wikipedia.org/wiki/Opportunity_cost

    That IMO is where the real tragedy of those past “War decisions” can be found.

  23. Anonymous says:

    The irony is that all this money was spent on negative assets and never actually ‘bought’ anything.

  24. Ugly Canuck says:

    Also, of course, the vietnam War still levies an ongoing cost: eg., the cost of caring/burying every deformed Vietnamese born, whose condition is attributable to the widespread use of Agent Orange throughout the rich rice-bowl of the Mekong Delta and Valley.
    But today’s Americans have other things/countries to occupy their attention, than the welfare of the Vietnamese. Which, IIRC, was ironically the justification of the spending on the Vietnam war offered to the US public at the time, was it not? Defending the South from communist aggression?
    Ah, memories!

  25. HorsePunchKid says:

    Here’s a spreadsheet I made comparing against the GDP:

    http://spreadsheets.google.com/pub?key=rXkkf0ebKkVRjIabiZzE-eQ&output=html

    I’m not claiming it’s particularly meaningful; I’m just providing the data.

  26. Anonymous says:

    I find it scary and a bit shaming that five of the six biggest squares on the left contain terms with which I am unfamiliar.

  27. Moriarty says:

    Gives the scale of the money involved, but otherwise an invalid direct comparison. Guaranteeing the liquidity of X dollars is different from buying X dollars worth of bombs. Also, I’d like to see it as percentage of GDP.

  28. JoshuaTerrell says:

    Stop whining! $50 billion is no big deal next to something called “Commercial Paper Funding Facility”? What is that? And why does it cost so much damn money?

  29. Haakon IV says:

    $15 million inflating to $297 billion makes no sense whatsoever. It implies that $1 in the early 1800s would be equivalent to $20,000 today.

    That’s just wrong: it’s more like $12 today, according to “The Inflation Calculator”. It’s hard to calculate inflation from that long ago, but the Bureau of Labor Statistics says $1 in 1913 is worth about $21 today. Does anyone serious believe there was 100000% worth of inflation between 1800 and 1900.

    As I noted in #36, that is less than 5% annual inflation. I’m not sure I believe The Inflation Calculator, as it implies significant deflation through the 19th century (e.g. 1803-1903, $1.00 becomes $0.60), but I couldn’t find the data pre-1913 in The 2009 Statistical Abstract. Average inflation from 1913-2007, that $21 you cite, is about 3.3%.

  30. JoshuaTerrell says:

    Oh wait, I read the chart wrong. Shut my mouth. Damn that’s alot of money.

  31. jphilby says:

    Purchasing power of money calculators:

    http://eh.net/hmit/

    According to this calculator, a $100 purchase in 1958 now costs $744. I think it’s more like 10-to-1; good wages in the mid-60s were over $2/hour.

    I think it’s more fascinating that, despite our constant preoccupation with getting and spending money, such figures are hard to find, harder to substantiate.

    But then, it’s all a shell game.

  32. Anonymous says:

    The items to the left are all related to the measures performed to avert the sort of economic consequences experienced in the US after the 1929 stock market crash, probably on the notion that it is easier on everyone to find better management for hundreds of otherwise sensible large businesses that are in operation than to reconstruct hundreds of replacement businesses from scratch. The conservative position that people and business should either sink or swim is still remarkably unpopular despite all the capital allotted to keep things going while management, guidelines and rules undergo the overhaul. The real trick is going to be to get all that extra money back out of the system ASAP once the system is sufficiently able to stand, and with the debt already accrued.

  33. Axx says:

    #1 DUNCAN <—— what he said

    These numbers are frightening, yes…but you really can’t take them seriously and keep a clear conscience without asking questions about GDP, average household income, etc. in *addition* to inflation.

    I may have quadrupled the amount of money I spend eating out over the past month, but if my paycheck increased by a factor of 10 then it’s not a big deal, is it?

  34. Anonymous says:

    Although the Marshall Plan appears, the cost of WWII itself is somewhere in the range of 2-5 trillion in today’s dollars (2000-5000 billion), and is NOT shown in the graphic.

    I think the comparison would still be impressive if even if WWII was actually included.

    Also, labeling the right pile “over 206 years” seems a little misleading, because other major events such as the Civil War and WWI are also missing. How about changing it to 100 years, and try and actually include all major spending events during that time frame, plus acknowledge the omission of “routine” spending on things like social security and defense?

  35. Anonymous says:

    This should give rise to a new unit of measurement for money, the ‘Moon Shot’

    In conversation, discussing “Commercial Paper Funding Facility”


    That could have gotten us 9 moon shots, man!

  36. Anonymous says:

    hey Cory

    in this link:
    http://www.bloomberg.com/apps/data?pid=avimage&iid=i0YrUuvkygWs

    (which is cited by Ritholtz as a source) the amount for term securities lending is 250 billion $ (follow federal reserve link)
    the bailout amount for Fannie Mae/Freddie Mac is 200 billion (follow treasury dep link), however the box for Fannie Mae/Freddie Mac in the above graphics looks more than double as big as the one for term securities lending

    ???????????

  37. Anonymous says:

    Reason: In your column I detect a certain skepticism at the notion that congressional spending creates jobs.

    Dave Barry: Of all the wonderful things government says, that’s always been just about my favorite. As opposed to if you get to keep the money. Because what you’ll do is go out and bury it in your yard, anything to prevent that money from creating jobs. They never stop saying it. They say it with a straight face and we in the press will write that down. We will say, “This is expected to create x number of jobs.” On the other hand, we never say that the money we removed from another part of the economy will kill some jobs.

  38. SamSam says:

    What Axx said. That’s the kind of point these kinds of infographics want to avoid.

    Be careful reading any graphic created by someone who is trying to prove a point. All the omissions and errors will only ever be biased in one direction.

    - Shaping the graphic in a misleading way. (Makes the left look bigger.)

    - Saying it’s comparing to all major expenditures in the past 206 years, yet leaving out major expenditures such as WWII which literally dwarf the values shown (all the values on the right total under $4 trillion. WWII alone adds an addition $5 Trillion, doubling the pile). (Makes the right look smaller.)

    - Comparing expenditures to loans as if they were the same thing. (Makes the left look bigger.)

    - Not adjusting compared to how much those dollars are actually worth (looking at GDP, income), making it a meaningless comparison. (Makes the right look smaller.)

    I’m not trying to minimize the bailout figures, I’m just saying that this is a text-book example of how to distort using misleading figures and bad numbers. It’s one that we should all learn from.

    Then again, Cory’s never seen a graphic depicting the terrible gob’ment spending that he didn’t want to post immediately.

  39. allen says:

    comments #1&2 are exactly what I was wondering, but looking at it, and knowing that the louisiana purchase was for =~ 15 billion, the values represented seem to have been adjusted for inflation

  40. Roku says:

    Has anyone else noticed the sudden flood of “Anonymous” commenters all disparaging Ritholz’ simple and cogent chart with spurious arguments?

    Looks like bankers and their stooges are trying their best to Astroturf any mention of the largest swindle in the history of the world!

    Yes, the chart is inflation-adjusted. No, WWII not being on there has nothing to do with anything. And if there was any realistic chance of (for instance) AIG paying back their bailout cash, private money would have stepped up and done it. The only way these banks will pay back bailout cash is with even more of our money.

  41. Haakon IV says:

    @Roku

    You’re making the classic mistake of ignoring the context and substance of every post that disagrees with your preconceived viewpoint.

    It is not “100% irrelevant” to comment, in response to a post about a single infographic, that both the information and the graphics are misleading. This does not imply that all of us who think that this is not a stellar example of a helpful figure are huge fans of the bailout, or that the numbers involved are not gargantuan.

    It’s not a helpful figure. The bailout is huge and scary. Both can be true.

  42. ltucker says:

    eh… this is interesting, but pretty crappy — they left out WWII, which would have nearly doubled the size of the right hand side ( an additional $3.6 trillion according to the data they based this on, see http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/ ). Personally, I don’t think including that would have really detracted from the point, but seeing it so blatantly omitted (and mentioned in the text describing it) makes me kind of annoyed.

  43. Ugly Canuck says:

    “Guaranteeing liquidity of X dollars”?
    I think you mean, guaranteeing the availability of X dollars (if some condition is met, ie should the Corp. default), so that the liquidity of the Corp. itself in question (more accurately, the Corp.’s debt) is thus guaranteed: but the Gov “guarantees” only to that extent – how liquid the cash which is issued as a result of the guarantee may be, is beyond any one entity’s “guarantee”, I think.
    I suppose that the cash (like all US cash) is as liquid as the “full faith and credit of the USA” can make it.
    It is by this cash that the liquidity of the Corp. is guaranteed by the Gov. – what that does to the value in exchange of the specie/cash used to so guarantee such Corp. debt (that is, the liquidity of the Dollar itself) is in fact the question of the present decade, IMHO – provided that drawing such cash remains only a possibility the damage to the value of the US dollar need not be very great nor lasting, I think.
    After all, with most all other obligations of the Treasury/Gov, usually there is some public & Congressional input on these kinds of undertaken Governmental obligations, involving the full “faith & credit” of the US Gov.
    To the extent – if any – that these bail-outs (so-called) deviate from such representative public scrutiny and consciously-adopted undertaking, precisely so far is it running against the grain of the US Constitution….and precisely so far IMHO is the value of the US dollar in foreign exchange undermined.

  44. SamSam says:

    The total cost of WWII to the US was about $5 Trillion dollars in today’s money, according to the sources here and here.

    That number is far, far bigger than most of the other boxes on the right-hand side, and would make the rhs look much bigger.

    Why was it not included?

  45. SamSam says:

    Whichever that comment way up there that mentioned the misleading shapes of this diagram was spot on.

    The important measure here is area of the boxes. The towering shapes only lead to misreading of the shapes — it cannot possible be easier to read the areas of these towers compared with reading the area if they were two squares.

    It reminds me of the book “How to lie with statistics.”

    I made a really quick mock-up of these squares moved around to form two big boxes: http://img.skitch.com/20090618-n5qgdyptdnks5b5yjfa88nar73.jpg

    The left is obviously still noticeably bigger, but much less so that the original diagram. I’m sure all the points that people are making are valid, but why start with a misleading diagram?

  46. Roku says:

    I didn’t realize Ritholz counted WWII in the text…I was only looking at the illustration. Clearly a mistake on Ritholz’ part, which I won’t excuse.

    However, that is still 100% irrelevant. You’re using the standard Republican technique of “nitpick a single error while ignoring the elephant the nit is attached to.”

    Classic example: the Republicans making a huge deal about whether the NBC/Rather GWB draft memo was real or not, while ignoring the proven fact that Bush Jr. escaped serving in Vietnam through his family’s highly irregular string-pulling. This deflected the discussion from whether Bush Jr. dodged the draft (which he did), and onto the irrelevant question of whether the dodges were illegal or just extremely questionable.

    So it is with the WWII example. The awkward fact that the bailouts have impoverished our entire nation for decades to come – with the only benefit being the preservation of the lavish lifestyles of Wall Street executives – is not measurably diminished by Ritholz’ textual slip.

    (Which, if you’ve followed Ritholz, you will realize is indeed a slip, because he’s quoted these statistics before without including WWII in the list.)

  47. SamSam says:

    (Note my diagram does not include the cost of WWII. Adding WWII makes the right-hand side increase by approximately 200%, according to my estimate.

    Since we can compare them better with my rough mock-up, we see that adding WWII would therefore make the right-hand side much bigger than the left-hand side).

  48. philoponia says:

    The bailout only costs a small amount of what it would have cost if there was no bailout. Bear Sterns which received the $29b loan when they had $2b in liquidity ($18b three days earlier) was meant to save $350b in assets and $13.4t in derivatives.

    That is like me lending you like $1000 to make sure that your $500,000 house is not going to be entirely worthless tomorrow. And for that matter, since your house would be worth whatever you could get for it (say $200, if you could get somebody to take it), what do you think the neighbor’s house would be worth?

    It sucks that we the taxpayers had to pay so much money, but we would have had to pay a lot more in lost home value if JPMorgan wasn’t forced to “save” the hard crash. Let me reiterate, it cost a lot of money. It just cost so much less (~80x or something) than if the fed did nothing.

    And this is the small square.

  49. Takuan says:

    And could there be a better time to trot out the Barking Monkey?! Yayy!
    http://politicalticker.blogs.cnn.com/2009/06/18/bush-takes-aim-at-obama-policies/

  50. Anonymous says:

    @19 “I find it scary and a bit shaming that five of the six biggest squares on the left contain terms with which I am unfamiliar.”

    You shouldn’t feel shamed.

    These “facilities” on the left that you see are brand new things. They didn’t exist before this financial crisis. They are inventions of the Federal Reserve.

    Their purpose is to provide a pot of money that can be lent to companies (such as American Express, for example) that have assets against which the money can be secured.

    The reason this was required was the massive losses by banks on real estate speculation. Since the banks had no more money to lend to big businesses … the Federal Reserve stepped in to provide financing.

    Where did the Fed get the money? They had the United States Mint print it for them. They created it out of thin air.

    That sounds fishy, but it’s really not. It’s how our fractional banking system works. The alternative was the bankruptcy of companies such as GMAC and some of the large credit card companies who couldn’t roll over their working capital loans.

  51. Anonymous says:

    WWII is missing, despite the text. So is WWI, the French and Indian War, and many, many other discretionary programs. For that matter, Social Security is missing.

    This is bogus.

  52. Remez says:

    Scariest thing by far is that I have absolutely no idea what half the stuff on the bailout side actually IS. Anything that ends in “Facility” is a total black box to me.

  53. Roku says:

    The spurious arguments by bailout-supporters (“Anonymous” and Samsam) in this thread are simply incredible, and are classic examples of deliberately lying to us with BAD LOGIC in an attempt to deflect fully justified public outrage.

    The first example of bad logic: arguing that WWII cost a lot, which somehow makes the comparison to all the other public expenditures irrelevant Seriously: You’re arguing that it’s OK to spend more money bailing out a few big banks for their own bad decisions than it cost to fight the entire Second World War, which destroyed all of Europe, *and* rebuild both Europe and Japan? Are you mad?

    The second example: arguing that these are “guarantees,” not direct payments, is simply silly. First, even the Fed can’t tell us how much of them has been spent, let alone to whom the money has been given. How do we expect money to be paid back if we don’t even know where it went?

    http://zerohedge.blogspot.com/2009/05/federal-reserve-can-not-account-for-9.html

    Plus, common sense and basic numbers can tell us this money will not be paid back. The fundamental issue here is the underlying asset of securitized loans no longer being of sufficient value to guarantee the outstanding principal — in short, someone sold someone else a $500,000 mortgage on a house that is only worth $250,000 now. The only way for all these loans to be paid back is to believe that in a steadily worsening economy with less and less employed people making less and less money, and with banks no longer willing to make no-doc, no-down option ARM loans, families making $50K/year will be able to pay $500,000 for a house again. This is obviously absurd.

    Don’t be fooled by the Astroturf: This is the biggest swindle in history, and we have given away America’s future in order to preserve the lavish lifestyles of banking executives.

  54. neurolux says:

    So this graph compares the layout of spending and LOANS which will be spent over the course of ~8 – 10 years against a cherry-picked historical graph of spending over the course of 206 years? Who falls for this crap?

  55. GuidoDavid says:

    Roku:
    Pointing the obvious mistakes of a very misleading graphic makes a person a Republican?

    Pointing mistakes should lead to correct them and strengthen one’s position, not to complain and name calling.

  56. Takuan says:

    “This is the biggest swindle in history, and we have given away America’s future in order to preserve the lavish lifestyles of banking executives.”

    not exactly. What has indeed transpired is that all American domestic and foreign policy decisions were made in light of the interests of the already wealthy and powerful for at least the past hundered years and now the well is running dry.

    What did any captain of industry or tycoon ever create that was new? They began with the natural resources, sucked them dry, enslaved the labour of the people and finally played with nothing but theoretic numbers on paper until even that was used up.

    We need a new economic theory that is wedded to anthropology.

  57. Thebes says:

    1- About loans. These represent money injected into the US economy which was created mostly “out of thin air”. That is why this is so scary, this is new money that did not exist before and DWARFS many major spending programs of the past. Its not just money spent, its money CREATED.

    The various “bail out programs” now amount to 13.9 TRILLION dollars- over 100 grand per US household and more than enough cash to cover New England plus all major US cities in a blanket of continuous dollar bills.

    2- Correcting for inflation, it seems that most of the boxes on the right hand side would actually be smaller if people are correct about the graph’s questionable inflation corrections. Of course it is very difficult to compare the dollar from 150 years ago with the dollar today, its more apples and oranges than dollars vs euros.

    3- We are obviously in for HYPER-INFLATION. Any reader of this who understands this should immediately begin stockpiling the items they will need for life once the hyper-inflation hits. I am not saying that a 100 dollar bill will be worth more as toilet paper than currency, but I wouldn’t be at all surprised if a good loaf of bread sells for over 100 bucks in a couple years.

    Probably we will end up with a new currency to replace the dollar.

    I had been saying that the Dow was going to hit 2k, now I think it will hit 2M, but a million won’t buy a good used car.

  58. nutbastard says:

    @#4

    “For example, the Louisiana Purchase was $15 million; the inflation-adjusted value is $297 billion”

    shit that kinda says it all, doesn’t it? that inflation has blown 15M up to 297B?

    that’s 1/19,800.

    fuuuuuuuuuuuuuuuuuuuuuuuuck.

  59. SamSam says:

    @Roku: For starters, I’m certainly not an astroturfer, being a long-time BB member. I’m just a guy who (1) has generally thought that people such as Paul Krugman, who supports this and more money spent, are respectable and probably know a lot more then me (a programmer) about the economy, and (2) is generally annoyed by misleading statistics, graphs, and logic by people who only know about as much as I do about this issue.

    Second, your suggestion that potential loans can be directly compared to expenditures such as bombs shows that I may not be the only one here with less-than-100% understanding of the issue…

    The TALF box, one of those huge ones, represents potential loans to well-qualified small businesses. Since when do we consider loans to be in the same column as actual costs?? That shows the ridiculous lack of thought that goes into such analyses.

    Sure, some of the money might not be paid back. How much? 5%? 10%? Ok, make that box 10% of it’s original size. These are loans to good businesses that we’re talking about, not giant holes like GM. And the reason that they need to be made by the government is that no banks have enough liquidity or security to be making these loans. Yet without small businesses being able to get loans, we get total collapse, as the Great Depression showed us.

  60. michael thorne says:

    Yet the Americans still can’t afford a national health program – sad.

  61. Haakon IV says:

    I don’t find the scaling of this chart to be very intuitive. I presume that the scaling of each square is such that the area is proportional to the inflation-adjusted dollar amounts, probably from this previous post (also linked by boingboing). Then the height of each stack doesn’t have much meaning for integrating the costs, it’s the total area of the stack that matters, and humans aren’t very good at eyeballing difference in areas even for similar shapes, much less for dissimilar ones.

    It’s not as bad as this previous graphic, but its information isn’t all that easy to extract.

  62. Anonymous says:

    The S&L crisis is the only item on the right hand side which is in any sense comparable to the items on the left — it’s the only one which was a financial guarantee, not an expenditure. What made fewer headlines is the actual cost — the difference between what the taxpayer paid for the properties which went into the Resolution Trust Corporation, and what they got out when they were auctioned off. The nice thing about backstopping a financial panic is that you are by definition buying at the bottom. As I recall, the RTC made money in the end, and for the taxpayer, it was a net *gain*, not a loss at all, despite the size of the guarantees, and all the whining at the time… not to mention the indirect benefits of preventing economic collapse. We’ll have to wait to see how the 2008-9 bailouts play out, but I find it interesting that some banks are already trying to give the money back.

  63. xjn says:

    “This is the biggest swindle in history, and we have given away America’s future in order to preserve the lavish lifestyles of banking executives.”

    maybe so… but when one creates a graph that says “SPENDING occurring in the last 12 months.” that includes figures for things that were NOT SPENT, but loans or potential spending, along with another graph labeled “Occurred over the past 206 years.” leaving out several very large expenditures that occurred in that time frame, and then stack boxes up in such a was as to obscure the relative proportions of the two sides, people may start to wonder about the intellectual honesty and motivations involved. One could go so far as to call such a graph deceptive.

    I’m still trying to determine if it was intentional or a genuine mental shortcoming. I think you may have given me the answer.

  64. GuidoDavid says:

    I know next to nothing about economy, yet, it is obvious that the graph is being presented in an extremely misleading way.

  65. darth_schmoo says:

    I’m not buying the chart. It’s tricky to compare the value of dollars between very different time periods. The chart here says an 1800 dollar is worth about $19,800 in today’s dollars (going by the Louisiana Purchase). Another source says $12.

    Also, it ignores the fact that we are wildly richer than the people of 1800 or 1900. Per capita GDP has quadrupled in the last hundred years, and I think population has done about the same.

    A better measure might be “GDP years.” That is, “How many years of present GDP would this cost.” You still have to deal with inflation adjustment, but it would deal with the issue that a project today for $16B and a project in 1900 for $1B (adjusted) represent about the same level of investment.

  66. Anonymous says:

    While I agree that this is a huge eye-opener, the label that says “Occurred over 206 years” is a little mis-leading. It makes it sound almost as if *every* expenditure during that time period is included (where’s WWII, for instance?)….whereas it’s really just a few hand-picked expenditures that happen to have taken placed between now and 206 years ago.

    There’s really no added value for including that label, as it doesn’t offer anything else except an opportunity to mislead the viewer.

  67. AngelaW says:

    Man, when Rachel Maddow brought this up in a speech a couple months ago ( http://calitics.com/showDiary.do?diaryId=8014 ) I nearly face-planted. This makes it seem way worse.

    ::HeadDesk::

  68. Anonymous says:

    It is good to see all that money spent,
    without having to kill people.

  69. Anonymous says:

    Ah, it’s only money.

  70. Anonymous says:

    The US made money on WWII. Doesn’t anybody read history anymore? All world trade was transformed into American dollars, forging a trade alliance designed to benefit America. (Interestingly, even the founders of the agreement said it was doomed to fail.) NATO came into existence. Britain was paying tribute to America until a few years ago.

    Good point about the money being lending, not spending. Perhaps Americans should be more concerned with the fact that they have educational standards and poverty on par with many third-world nations, and start demanding their government spend money in useful ways, which Obama is at least attempting to do. Perhaps it’s time to make use of the whole “freedom of speech” thing. People do it in the rest of the first world far more than they do in America.

    Free speech, of course, requires a free, impartial press (who here watches Fox News?) and a well educated public (uh oh).

  71. Anonymous says:

    Stating something is obvious and using all caps doesn’t make it true.

    I don’t mean to be a jerk, but Thebes, buddy, I highly doubt that a loaf of bread will cost $100 in the next few years. This US isn’t Zimbabwe, after all.

    Course, if I’m wrong, I’ll buy you a loaf of bread with half my weekly wages, and we can sit and starve together.

  72. duncan says:

    I was just wondering whether the amounts for the past 206 years have been compensated for inflation. I think a percentage of GDP might be a better comparison as we can see then how much of the budget the government actually spent on those events.

  73. Haakon IV says:

    @#18

    shit that kinda says it all, doesn’t it? that inflation has blown 15M up to 297B?

    that’s 1/19,800.

    The magic of compound interest—that’s less than 5% per year. Also, it was a pretty good investment anyway. Do you think that 13 U.S. states or so are worth less than that now?

  74. Anonymous says:

    $15 million inflating to $297 billion makes no sense whatsoever. It implies that $1 in the early 1800s would be equivalent to $20,000 today.

    That’s just wrong: it’s more like $12 today, according to “The Inflation Calculator”. It’s hard to calculate inflation from that long ago, but the Bureau of Labor Statistics says $1 in 1913 is worth about $21 today. Does anyone serious believe there was 100000% worth of inflation between 1800 and 1900.

    The “inflation adjusted” numbers in that graphic and site are utterly wrong. It also doesn’t show WW1, WW2, or the Civil War. Those were free, I guess.

    – Dave

  75. Anonymous says:

    #52: B-b-but THE CLAW!!!

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