Total Bailout Funds committed are approaching $9.7 TRILLION, as reported by Bloomberg this morning.
And the authors of the article had an interesting way of spelling out just how much that is, in terms we can all get our arms around:
The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.
That is a lot of cash. You know, economists and government officials continue to state how important it is for Americans to begin spending money on consumer items again, in order to jump-start the economy. One thing is for sure, Government is not asking us to do anything that it’s not willing to do first. And a fine example of spending the Government is setting!
I have said this before, but these bailouts feel more and more like an average American household applying for and getting a new Discover card – even at 0% interest for the introductary period – then transferring the AmEx balance that has been so bothersome to the new Discover. Then, later that weekend, going to the mall with a new lease on spending, with the 0-balance AmEx card in their wallet.
A better example may be to severly cut spending, to limit salaray increases on…members of congress, and to make the first step to saving on spending and making a dent in the federal deficit. (I know, deficit’s aren’t always bad, they can be a catalyst to an economy. I get it. But the limit was surpassed some time ago. About the time that foreign governments began questioning the sanity of continuing to purchase our debt).
What can we do as Georgians living in our homes, raising our families? We could picket. But that won’t do any good, in my opinion. So, practical things that we can do are:
- Pay off non-preferred debt (i.e. any debt that does not carry with it a tax benefit. Read, credit cards, car loans, student loans, etc)
- If ‘paying off’ debt is not possible in the short run, then roll it into a new, low-interest mortgage loan. This is not the ideal long-term plan, but it solves the short-term goal of getting monthly cash flow to it’s maximum.
- Save the difference in savings, until you reach 6 months household expenses.
- Cut superfluous expenses, and save the difference in a liquid account.
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