Bailout Cost to Average Taxpayer (Revisited)…
Following on from our article on the real source of the “credit crisis”, we’ve had a ton of requests for the methodology behind our assertion that the average cost to taxpayers of the “bailout” is $5,354. That figure used 2003 IRS data; we’ve since gotten our hands on 2005 data (the IRS isn’t exactly known for their efficiency…), so here it is: a calculation of the impact of the possible range of costs associated with the “bailout”:
Estimated costs of bailout:
Bear Stearns: $29,000,000,000.
Freddie and Fannie: $200,000,000,000.
Federal Bailout Package: $700,000,000,000.
Number of Personal Income Taxes Filed (2005):
Obligation per Taxpayer:
$1,014,000,000,000. / 134,362,678 = $7,546.74
So, there you have it: $7,546.74 for each and every taxpayer, on average, spent by the government to buy assets at prices no one is willing to freely buy them at.
Each individual taxpayer could alternately spend that $7,546.74 on:
- One year of tuition, on average, at a public four-year college or university ($6,185).
- 2001 Dodge Ram 2500 Pickup Truck ($7,600).
- 3.03 carat diamond engagement ring ($7,395).
- Feeding his or her family for one year ($5,781).
- Providing essential food and shelter for 18 children in a third world country for one year ($7,560). (If everyone picked this option, there would be no starving children in the world – it’s enough money to provide food and shelter for 2.418 billion children for one year).
- 1,886 gallons of gas (at $4/gallon).
- Two first-class vacations for a family of four.
By comparison, the $1,014,000,000,000. being considered on the bailout is more than the US government spends annually on:
- Social Security: $586.1 billion
- Defense: $548.8 billion
- Medicare: $394.5 billion
- Unemployment and Welfare: $294.0 billion
- Medicaid and Other Healthcare: $276.4 billion
- Interest on Debt: $243.7 billion (watch for this one to balloon…)
- Education and Training: $89.9 billion
- Transportation: $76.9 billion
- Veterans’ Benefits: $72.6 billion
- Justice: $43.5 billion
- Natural Resources and Environment: $33.1 billion
- Foreign Affairs: $32.5 billion
- Agriculture: $27.0 billion
- Community and Regional Development: $26.8 billion
- Science and Technology: $25.0 billion
- Energy: $23.5 billion
- General Government: $20.1 billion
Click here for 2007 US Government Spending data.
Keep in mind there is no such thing as “government money” – the government has no money, except as it appropriates from the populace by way of taxation. That appropriation can take the form of direct taxation or issuing Treasure Bills and thereby deferring the taxation.