Thanks for the commentary on this figure. I think using it the way David Brooks does - as a Really Big Number without caveat - is pretty irresponsible.

Heeeeeeeeeelllllp. I posted a comment here, and it was held for moderation, probably because I had three links in it, which I guess offends some god of spam control.

It WAS good stuff.....

Although, it's worth noting that the US economy as a percent of the world economy has been shrinking steadily since WWII.

At the end of the war, we were 50% of the world's GDP, while now we are around 25%.

US spending on WWII was likewise probably something in the neighborhood of 50% of total expenditure. Furthermore, we had the largest amount of 'expendable' cash at that point. If the would had to have a worldwide bailout to save the economies of the world (i.e. the Marshall Plan), the US was the only nation able to do so and would be more or less single-handedly responsible.

So, is current US bailout spending close to 25% of total world bailout spending? Are we 'carrying our weight,' so to speak? Especially given the incentives to free ride on other countries' bailouts. And can we really be a difference-maker with only 25% of world GDP like the US once could?

Right...but the opportunity cost of the money remains. That 4 trillion (or so) dollars will earn a return, but so did NASA. So did government spending on WWII. So does (as I think Calculated Risk points out) spending on education. If we think that the money we are spending on the bailout earns us a greater return than (say) another bailout or other forms of government spending, that's great. But it is just as irresponsible to rebut claims of profligate spending with the insinuation that in the end, no money has been outlaid.

All these trillions and nothing yet to save our industrial base in Detroit? What is with that?

a) Completely agree Ezra. Sadly a lot of progressive blogs do not so they are using crazy stats like 7 trillion. When it's pointed out that these are mostly loans- their response is that it does not matter. I think there is a danger that there is a strong non-realist element of the progressive blogsout there who 1) do not get the nature of the issues here and 2) even if they did get it- do not care, and are more concern with progressive idealogical victory over conservatives so they are willing to lie.

b) Miriam- fool us once, get 350 bllion. Try that again, and you are at least going to tell us exactly how you are going 1) get our money back and 2) show how you are not going to come back begging (read: how you are going to make fuel effificent cars rather than SUVs).

Say what you want but please don't try to argue that those 5 trillion or so in liabilities are not real money. Those liabilities are on the national balance sheet and will remain there for a while. At some point, creditors wil look at that balance sheet and they won't like what they see. My prediction is that the year 2008 will have been for the USA what 1988 was for the Soviet Union. What did Soviet economists and politicians and intellectuals talk about in 1988? The progress of socialism, that's what. Let me also remind you (many of you are too young to remember this) that when we in the West bragged about the Soviet Union being bankrupt, they were ver very far away from carrying liabilities amounting to 5 trillion. Not even in relative numbers did the Soviet Union ever come close to owing the kind of money that the USA is owing right now. We are in deep trouble and your whistling in the dark doesn't make it any better.

The truth is not found in pretending a loan is the same as giving money away. That's just a lie or, at the very least, a confusion about what's occuring. In needs to be understood where we are going to get the money back, and where are not. Treating one as the same as the other confuses the debate. The MSM does it for headline grabbing. Partisans do it for idealogical reasons to manipulate the debate. Neither of which is interested in the public.

I think there is a danger that there is a strong non-realist element of the progressive blogsout there who 1) do not get the nature of the issues here and 2) even if they did get it- do not care, and are more concern with progressive idealogical victory over conservatives so they are willing to lie.

Ya' think?

I expect these types of behaviors from conservatives. I do not expect them from progressives. We can not afford both sides to become faith based. So yes- I am concerned how quickly some went off the reality reservation on the face of a real economic crisis. I am not an economic expert. But neither are some of the people talking about these issues. That's what's so scary. They dont; seem to care they don't have a clue even by my relative knowledge of econ.

Liberals are absolutely giddy about presiding over this record spending. Bush is also not without blame.

Socialism has always been the goal and here's their opportunity while the people are frightened.

"faith based", that's a good description. The assumption that bailout spending has been "loans" rather than "giving money away" is faith based. There is simply no evidence for it.

"I am not an economic expert. But neither are some of the people talking about these issues. That's what's so scary."

Which "economic experts" would you rather listen to? Greemspan? Bernanke? All those guys that were constitutionally incapable to recognize a bubble when it was flying in their face? Crying for "economic experts" after all the havoc they have wreaked on us is just crazy. At the limit, we could need some accounting experts. What have the 5 trillion pledged so far to bail out the financial industry done to the national balance sheet? How would they be accounted for soundly and honestly? It seems nobody even wants to know at present.

Here's the problem: under some scenarios all of that money becomes real spending, because no one pays back their loans and the purchased assets are worthless. Under others, everything gets paid back and all we have is the opportunity cost of the credit used for bailout instead of useful things.

What I'd like to see instead of either of those (particularly the first) is a classic whipsaw -- which the Fed has undertaken in the past. Arrange matters so that the people putting up securities as collateral (not anywhere near face value, one desperately assumes) don't make their payments, and then take the necessary actions to make the now-fed-owned securities worth much closer to face (say by preventing defaults on so many of the fundamentally underlying loans). But that would be mean, and we can't be mean to the financial industry, because they've been so nice to us.