The latest number, which includes the Citigroup rescue, is $7.7 trillion. Thatâ€™s roughly half of Americaâ€™s GDP.
[A]ny way you slice it, we are talking about really, really large amounts of money here. Barry Ritholtz, a financial blogger and Wall Street analyst, offers some perspective. Adjusting for inflation, the Marshall Plan cost $115.3 billion. The Louisiana Purchase: $217 billion. The race to the moon: $237 billion. The New Deal: $500 billion (estimated). The Korean War: $454 billion. The Iraq war: $597 billion.
You can add all of these things together and still not come close to what taxpayers are on the hook for already. You could even throw in the Savings and Loan bailout ($256 billion), the Vietnam War ($698 billion) and all of NASA ($851 billion) and still come up short.
Obama says he doesnâ€™t want spending as usual when it comes to formulating his impending mother of all stimulus packages. (Estimates vary from $500 billion to $700 billion, but who knows how high that number will go?)
So far, all we know for sure is that he wants massive increases in infrastructure â€œinvestment.â€ Thatâ€™s fine with me, so long as itâ€™s the infrastructure we need (though history shows such expenditures usually come on-line well after a recession is already over).
But rather than blow money on a lavish reenactment of the New Deal, or continue bailing out undeserving corporations, why not really think outside the box? Rep. Louie Gohmert (R., Texas) suggests an across-the-board reprieve on paying 2008 income taxes. This would leave an extra $1.2 trillion in the hands of Americans, who are the best stewards of their own money. Nobel Prize-winning economist Robert Mundell proposes a one-year moratorium on corporate income taxes in order to stimulate investment, job creation and the like. That wouldnâ€™t be as popular, for understandable reasons.
The details can be negotiated, but this sort of approach would certainly create more jobs and spur more consumer demand than paying for a lot of asphalt. It would buy a lot more prosperity than any corporate bailout. Politically, it could buy Obama and Congress a year to formulate a serious tax-reform proposal. And â€” hereâ€™s the amazing part â€” it would be much cheaper than what weâ€™ve spent already.
Really? You think everything they’ve done so far is just hunky dory?
How about we follow the advice of both Mundell & Ghomert and not collect corporate or personal income taxes?
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