A Little Funny Math Just for Fun (or, how screwed up is this really?)
$700b in subprime mortgages by 2007.
About a $200b loss in property values on those properties.
Cost to bail out all the mortgages and avoid all the other hassles? About $200b but with rights to real estate to the taxpayers.
What we did instead:
Took over Fannie and Freddie for likely cost of about $50-100b.
Gave JPM deal on BSC worth about $30b.
Bailed out AIG for about $125b and counting.
Paulson Plan: $700b.
Bank Capital: $250b.
FDIC actions: tens of billions so far.
FED actions: tens of billions so far.
So, if we needed $200b, but put in about $1.6t (see WSJ which added if all up so far, hmm, might have been FT), we're too the good by $1.4t. Ummmm, wait a second. We spent $1.6t for a $200b problem. Why'd we do that. Oh yeah that's right. It would have been socialistic to bail out the mortgage holders. What did that Napolean Dynamite guy say? Freakin' idiots!