Wednesday, July 22, 2009

Bailout Totals: $23.7 Trillion or $3 Trillion


The independent overseer of the $700 billion bailout has caused a ruckus over an important question: How much do taxpayers have on the line?

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, said the total amount committed for federal programs supporting companies, industries and consumers affected by the economic meltdown was $23.7 trillion...

In an interview with CNNMoney on Wednesday, Barofsky said the actual amount of money outstanding is closer to $3 trillion.

Barofsky's math wasn't wrong. It's just that the $23.7 trillion figure assumes that all government rescue programs are used to their full extent and suffered total losses.

read the CNN story

My thoughts: When you make bad bets you expect to lose the entire amount. The total will ultimately be closer to 23 than 3.

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