Value of 2008 Bailouts Exceeds Combined Costs of All Major U.S. Wars
Thursday, December 18, 2008 By Fred Lucas, Staff Writer
In this Sept. 23, 2008 file photo, the amount of U.S. national debt on Sept. 23 is shown on the National Debt Clock in New York. (AP Photos/Bebeto Matthews, file)
(CNSNews.com) – The total value of the bailouts undertaken by the federal government in 2008 now exceeds the combined cost of every major war the United States has ever engaged in, according to a comparison of war costs calculated by the Congressional Research Service (CRS) and the value of the bailouts as calculated by Bloomberg News or Bianco Research.
According to CRS, all major U.S. wars (including such events as the American Revolution, the War of 1812, the Civil War, the Spanish American War, World War I, World War II, Korea, Vietnam, Iraq and Afghanistan, but not the invasion of Panama or the Kosovo War), cost a total of $7.2 trillion in inflation-adjusted 2008 dollars.
According to Bloomberg, the federal government has made commitments worth a total of $8.5 trillion in the bailouts of 2008. That includes actual expenditures as well as loan and asset guarantees.
Bianco Research puts the total value of the bailouts at $8.7 trillion.
The $296 billion spent on World War II, America’s most expensive war, would be $4.1 trillion adjusted to today’s dollars, according to the CRS report from June. The adjusted cost of the Civil War would be $60.4 billion for both the Union and the Confederacy combined. The inflation-adjusted cost of the Vietnam War would be $686 billion. The cost of the current Iraq war up to last June was $648 billion, while the adjusted cost for Afghanistan to that point was $171 billion.
The total cost of the American Revolution was a relatively inexpensive $1.8 billion.
“World War II was financed by savings, the American people’s savings, when Americans bought war bonds,” said Olivier Garret, CEO of Casey Research, who analyzed the value of the bailout compared to the major U.S. wars and other major historical government expenses. “Today, families are in debt and government is in debt.”
In this Sept. 25, 2008 file photo, Dara Blumenthal, of Brooklyn, holds up a sign during a rally against Wall Street bailout in front of the New York Stock Exchange in New York. (AP Photo/Mary Altaffer, file)
A Bianco Research report cited inPolitico puts the number for the total value of bailouts at $8.7 trillion and also affirms the value to be higher than the cost of all American wars and historic initiatives. A spokesman with Bianco Research could not be reached for comment as this story went to press.
The bailouts, led by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, were taken as emergency actions to keep U.S. companies from going under and to prevent a total financial markets meltdown in the United States. Similar bailouts were issued in other countries to address the global financial crisis.
The Bush administration is mulling whether to use some of the $700 billion in TARP funds approved by Congress to bailout the financial industry to bailout U.S. automakers.
The bailouts could put U.S. taxpayers in a tough spot in the future, said Pete Sepp, spokesman for the National Taxpayers Union.
“I’m assuming the figures do not include the Cold War defense expenditures, which would probably amount to several trillion on their own,” Sepp told CNSNews.com. “In any case, it’s a stark illustration of just how quickly the federal government has gotten into a huge financial hole and dragged taxpayers into it in the process.”
“We can only hope and pray that many of these liabilities and guarantees and commitments the government has made will not have to be made good on,” Sepp said. “If we were to be responsible for paying out all of these obligations, even in the period of one or two years, it would be financially disastrous to the government’s credit rating and our own as taxpayers.”
Garret pointed to the cost that will be paid by Americans in the future. “Future generations of Americans are going to continue to finance the enormous amount of debt,” he said.