Putting Fiscal and Monetary Stimulus in Historical Context
The bail out numbers,amazing!
Regards,
2008-2012 Fiscal and Monetary Stimulus
US$B
Bear Stearns
29
Economic stimulus checks
178
Bush Home Owners Bailout
300
Automakers Bailout
25
Fannie Mae and Freddie Mac Bailout
400
AIG Bailout
42
Emergency Economic Stabilization Act of 2008 (TARP)
700
American Recovery and Reinvestment Act of 2009
787
Obama Home Owners Bailout
275
Small Business Loans
15
Automakers Bailout
22
Quantitative Easing I
1750
Quantitative Easing II
600
Operation Twist
400
Extending Payroll Tax Cut
100
Quantitative Easing III **
960
Quantitative Easing IV **
1080
Total Stimulus
$7,663
2011 GDP
15,606
Total Stimulus % GDP
49.1%
** QE III was announced by the Federal Reserve on September 13, 2012 entailing purchases of mortgage backed securities at a pace of $40B a month, while QE IV was announced on December 12, 2012 and included additional purchases of long term Treasury securities at a pace of $45B per month. Both programs run until the unemployment rate falls below 6.5%, one and two year inflation expectations remain below 2.5%, and long term inflation expectations remain anchored. We have assumed these programs last 24 months. Data as at December 12, 2012. Sources: Treasury, Federal Reserve, New York Times, Bloomberg, KKR Global Macro & Asset Allocation analysis.
In 2008 we had an approximate total mortgage debt of 11 trillion.
So instead of making Wall St richer we could have taken a few trillion of those dollars and simply payed off a large percentage of those homes. A simple program that would have perhaps identified owner occupants with incomes under say 100k could have had their entire mortgage paid off. Then payoff a smaller amount for some higher incomes. Well I guess it was better to bailout Wall St and keep the majority of the population in debt.
[quote=SD Realtor]In 2008 we had an approximate total mortgage debt of 11 trillion.
So instead of making Wall St richer we could have taken a few trillion of those dollars and simply payed off a large percentage of those homes. A simple program that would have perhaps identified owner occupants with incomes under say 100k could have had their entire mortgage paid off. Then payoff a smaller amount for some higher incomes. Well I guess it was better to bailout Wall St and keep the majority of the population in debt.[/quote]
Instead of favoring home debtors who were irresponsible, we could have given everybody (including renters) a certain amount, instead. Or, we could have let the lenders and borrowers who caused the bubble sort it out themselves, and not used the GSEs and FHA (or any other entities/methods) to bail out the private market.
This is true. I have no problem with that method either. Of course we were told that the bailouts were a must. The theme just recurred with the fiscal “cliff”.
Good thing we have all these people looking out for us. Funny how the rich seem to benefit from each of these moves while the general public just gets deeper into debt.
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