To the tune of 700 billion USD, the financial bailout of weakened US financial institutions has become law.
President Bush signed the $700 billion rescue package shortly after the House reversed itself and adopted the plan for the Treasury to intervene in financial markets.
The money is meant to buy up mortage-backed securities whose value had dropped sharply or had become impossible to sell. The bill goes to the taxpayer.
Arguments were that the injection was necessary to avoid further weakening of the US economy. A more sceptical view–one I agree with–is that the money is necessary to prop-up a fianancial system that has become corrupt and unresponsive to real needs.
700 billion. That is a big number. About $2,300 for every person in the US. Or–as Odograph notes on the Environmental Economics blog–a one billion dollar endowment for 700 different universities, probably enough to make university education free.
How else might the money be spent?
- $20,000 for every poor family in the U.S.
- $300 for people worldwide who live on less than $2 per day
- More than enough to virtually eliminate AIDS through treatment, prevention, and research.
Why not funnel the money into debt relief, allowing people to pay off their mortgages to begin with?