A Trillion Dollars On Display

What does one TRILLION dollars look like?
04/01/09 - PageTutor.com

The final graphic at the above link shows the volume of $1 trillion in $100 bills, stacked onto 10,000 shipping pallets. The graphic is 50 wide, 100 deep, and 2 high.

$1 trillion would buy 4 million houses, each house costing $250,000.

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Fannie Mae and Freddie Mac are Government Sponsored Enterprises, and the biggest companies in the mortgage market. They borrowed $5.4 trillion to buy home mortgages and package them into bonds. At least $1.5 trillion were sub-prime mortgages, the ones most in trouble now. They set the standards for what was required for a loan. They did this under close government oversight, regulation, and approval. They are essentially departments of the government.

Private banks put together another $1.5 trillion of sub-prime mortgages, all under government oversight, regulation, and approval.

AIG went broke guaranteeing the value of private bonds built on mortgages that were entirely similar to those that Fannie and Freddie were buying and packaging into their own bonds. The credit rating agencies regarded these bonds as AAA, highest quality. Maybe this is why the government felt like bailing out AIG, since AIG was doing exactly what the government wanted it to do when it failed.

It is ridiculous for our legislators to claim that this crisis was caused by a "lack of regulation" of financial services. Consider the following when you hear cries for "more regulation" to keep such disasters from happening in the future, unless you mean more regulation of Congress.

• The losses are concentrated in the institutions which were most directly regulated.
• The regulation was done by congressional and senate committees, and by OHFEO, the requlatory agency created by Congress to control housing lenders.
• Housing loans and housing policy were the most regulated parts of our economy.
• Lenders were doing what the government wanted them to do, using decreasing credit standards for granting loans.

Financial Rescue Nears Value of Total GDP
03/31/09 - Bloomberg.com by Mark Pittman and Bob Ivry

The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

This money isn't yet lost, so it is not yet budgeted as an expense. I suspect that trillions will in fact be lost from these "stabilizations" and guarantees.

Spending on "stimulus" and new government programs will increase the cumulative deficit to $9.3 trillion by 2019, in addition to a $1.9 trillion increase in taxes over the same period. The Congressional Budget Office made these estimates. The CBO reports to Congress, and is now directed by the Democrats as the majority party.

It will be your job to pay it all back, or maybe your children's job.

The government isn't helping our country's problems. It caused our financial problems through guarantees and housing policy, and now it is making those problems bigger.

People in the private sector have the knowledge to unwind this mess. The government is discouraging them from acting, through unpredictable policies and massive borrowing that could ruin them.

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We Guarantee It
The government is guaranteeing us into poverty.

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Visualizing the US Debt
July 2011 - Demonocracy
Similiar graphics showing $1 trillion, and more showing the size of the US Debt. Did you guess higher than the Empire State Building in New York City?