Henry Paulson and Ben Bernanke want the $700bn bail-out of greedy banks to be approved so that the financial system in the United States doesn’t collapse, because if it does collapse then a lot of Americans will be in the shit and it will have a knock-on affect here in Britain too.
So how much is $700 billion dollars? Well, it’s $700,000,000,000 or 700 thousand million dollars, close to a trillion dollars (a million million dollars) and roughly equivalent to the tune of $2300 for every single man, woman and child in the United States today*.
In many respects I want this deal to go through; it *may* just save the US banks and prevent the financial system from caving in, that in turn *might* prevent other financial systems worldwide from failing and ordinary people from suffering.
But at the same time it doesn’t punish those guilty of dreaming up elaborate schemes to sell mortgages to people who can’t afford them and then hide the “toxic assets” in amongst real assets. American citizens, despite being given $600 each to help boost consumer spending, are now being robbed of approximately $2333 per person in order to stop them suffering in circumstances which are not of their own making.
But exactly how much is $700bn in the grand scheme of things?
700 billion dollars is greater than the GDP of more than 90% of the world’s countries, going by the figures on wikipiedia’s list of countries by GDP. Only 16 countries in the world have an annual GDP greater than that; it’s a bit like robbing Turkey of all its wealth for one whole year and giving it to the banks. It’s an even greater amount than the combined GDP of oil-rich states like Saudi Arabia AND Iran. That leaves 164 or so countries with a GDP of less than $700bn or 100 times the GDP of Papua New Guinea!
So before they give the go-ahead to this rescue plan just think about how much money the banks are after in order to save them from drowning in their own poisonous shit.
* The figure comes from the approximate population of the US being 300 million. 700 billion divided by 300 million equals 2333. It’s a very rough and ready figure as it does include the whole population of the US which means we counted children, senior citizens and the unemployed. Realistically, if we had the figure for the number of working population in the USA we’d have a far more accurate figure and a much higher one too! But I’m just a blogger and only an amateur statistician/economist 😉