Wednesday, October 1, 2008
How Much is $700 Billion?
The short answer: a lot. The long answer: depends on how you look at it.
Whatever your viewpoint, here's how $700 billion - the figure inked in the initial dead-in-the-water government bailout bill for Wall Street - compares to other vast sums.
NASA in fiscal year 2009 will launch several missions into space and pay for hundreds of people to operate a host of space telescopes and even remote robots on Mars and run a PR and media department that puts most large corporations to shame. The agency's budget: $17.6 billion, or 2.5 percent of the bailout sum.
The National Science Foundation (NSF) has an annual budget of $6.06 billion to support research and education on astronomy, chemistry, materials science, computing, engineering, earth sciences, nanoscience and physics (among others) at more than 1,900 universities and institutions across the United States.
You have to turn to much bigger initiatives, like war and defense, to get beyond this chump change and approach the bailout figure.
From 2003 through the end of fiscal year 2009, Congress has appropriated $606 billion for military operations and other activities associated with the war in Iraq, according to the Congressional Budget Office (CBO). The entire military budget for fiscal 2008 is $481.4 billion.
Social Security is a $608 billion annual program.
Many analysts fear the bailout because the cost must ultimately be borne by taxpayers.
Based on the U.S. Census Bureau's estimate of the current population of about 305 million people, each person would have to pay $2,300 to fund the $700,000,000,000. If each American (including children) paid a dollar a day, it would take more than six years to pay the money in full. One might argue, however, that this $700 billion would be a modest splash in the bucket of national debt, which already stands at well over $9 trillion (which means you already owe $31,642 each).
Even the New York Yankees third baseman Alex Rodriguez would lose sleep over all those zeroes. Currently the top paid major league baseball player, Rodriguez takes home $28 million a year, meaning it would take 25,000 A-Rod salaries to carry the $700 billion.
Nobody is rich enough to pay back this $700 billion by himself. In fact, the Forbes 400 richest list recently came out. It would take most of what these 400 people collectively have - a combined net worth of $1.57 trillion - to dig out of this mess.