How much is 700 billion Dollars?

September 26, 2008 | By Paul Mackenzie Ross | Filed in: finance, politics.

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┬ácountries 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 ­čśë



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2 comments on “How much is 700 billion Dollars?

  1. Betsy RossNo Gravatar says:

    Your facts are interesting. But you have the bailout scenario all wrong. What actually occurred was that the American political candidates could not get enough backing and funding from the American people in order to get re-elected, or in Obama and McCain’s cases, elected. The majority of Americans are sick of the two political parties system and those two parties agendas which have progressively moved away from our roots and Constitution. So, since they could not get enough private donations, they took out interest bearing loans at a rate, as you can see, that exceed the GNP of most nations in order to get elected, and then those banks cried poverty in order to get those sums repaid, billing it as a public debt instead of a private debt against those candidates. Obama sold out his own children to get elected, is what happened, as did McCain to run his campaign. The market, of course, then crashed and the entire bailout was placed under the jurisdiction of the Secretary of Treasury to keep the details out of public view.

    American politics has reached a new low, and those traitors in Washington sold out their own kids, and all of America’s children, in order to remain in office. And affected the world markets also in the process.

    With the American people the greatest victims of all.

  2. Paul Mackenzie RossNo Gravatar says:

    Hi Betsy,

    You have an interesting namesake… the creator of the first ever American flag, I believe? That seems very appropriate for your mention of the roots of the American Constitution.

    Thanks for your input, Betsy. Whilst I admit to oversimplifying the details of post for a general voxpop style overview I don’t believe that what I wrote about the $700 billion bailout can be “all wrong”.

    Of course you’re correct in the fact that a two-party system is a problem in the USA. I mention this in my post on American Politics where I believe that, in simple terms, it merely creates polarisation with no third way, no middle ground, no alternatives.

    I also agree that political campaigning in the United States has become a grossly distorted circus freakshow that can only be run with vast amounts of money. That’s not the America I remember as a kid when I recall that humble farmers could be Presidents. Since when did wealth qualify anybody to be capable of leadership?

    Yes, America’s children do seem to have been sold down the river and in Britain our own short-sighted government seems to be banking the future national debt in order to dig us out of the hole that we are currently in. But $700 billion is still a bailout for the incredible trade in Collateralised Debt Obligations stemming from the housing market.

    If you have any evidence of the bailout being a result of the cost of political campaigning then I’d very interested to see the facts or even any anecdotal evidence if it has been, as you say, swept under the carpet.

    I don’t disagree that the campaigning may be a part of the whole financial meltdown scenario and, to a very small degree, a contributory factor but I find it a little too convenient that the housing market bubble just came along at the right time in order to be a scapegoat.

    I predicted about 4/5 years ago that subprime would end in tears and for presidential campaigning to be a reason for this current predicament is too much of a curveball! More likely a candidate, if you’ll forgive the pun, would be the cost of the Iraq War with the “defence” spending, the syphoning-off of funds into phantom operations and the rehabilitation of the many seriously wounded US soldiers.

    But, details aside, the current administration has been the worst ever in American history and in two weeks it will be gone. Although I don’t like the fact that Bush will still cost American taxpayers far too much money to have Secret Service protection for the next 10 years and take a huge pension nearing $200,000 a year!

    Happy New Year, Betsy, and let’s hope America can be restored over the coming decades.

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