Treasury's Fuzzy Math
All week, politicians have been debating a proposed Treasury Department proposal to allow the U.S. government to spend $700 billion to bail out Wall Street firms in the hopes of staving off a financial meltdown.
So where did that $700 billion figure come from? The response a Treasury spokeswoman gave to Forbes.com on that question doesn't exactly inspire confidence: "It's not based on any particular data point," she said. "We just wanted to choose a really large number."
(Hat tip: Andrew Sullivan)
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This coming from the same administration that gave us NSPS and the Iraq War- weapons of mass (or is it financial) destruction? This doesn't inspire confidence. Perhaps the number came from the financial industry itself. I think this is George Bush's buddies taking one more huge bite of the Apple before his administration checks out.
Jeeves Posted Friday, September 26, 2008 8:45 AMWhen you're giving away money that someone else is going to be responsible for repaying, any figure works. Just make the amount big enough so that even if it's trimmed back it's still a whole lot.
Ted Bean Posted Friday, September 26, 2008 1:30 PMI mis-overestimated the process that produced the 700 billion number. I thought it probably went like this:
It's probably going to cost at least a trillion dollars, but no one would agree to that.
If we say we want 500 billion, it'll sound like we know for sure how much we need, and we don't.
If we say we need 750 billion, it'll still sound too precise, and also maybe too big.
So I guess we should ask for 700 billion.
Louise Kosta Posted Saturday, September 27, 2008 1:14 AM700 is just a beginning figure folk. The language of the bill allows for, "May I have another Sir?". Gentlemen, start your Treasury presses!
iggy Posted Monday, September 29, 2008 9:34 AMIn the last 20 years, banking/finance/insurance/real estate pumped $2 billion into Congressional campaign coffers. The number was based on a very modest return on investment of 375,000%.
As an aside, Barney Frank got $1.9 million, and this year, $50 million went to Obama & McCain (almost evenly split).
M_Onger Posted Monday, September 29, 2008 11:02 AM