Wednesday, February 4, 2009

The Source (Paul Hein)

Paul Hein wants to know where the $3 trillion in bailouts is going to come from:

The figure currently being bandied about for the bailout is three trillion. That’s three trillion dollars, which could be more meaningful if we knew what “dollars” were. But whatever they are, three trillion of them is a number so large that one simply cannot comprehend it. It might even be thought to be meaningless, because one doesn’t experience “trillions” of anything. Sure, there are easily trillions of molecules in our bodies, but they are invisible. We cannot see them or appreciate them directly. Come to think of it, that’s true of modern money, too.

But whether a check is for ten dollars, or ten billion dollars, it is expected that those numbers entitle the payee to something--if only other numbers borrowed into existence by someone, somewhere, sometime. They could be numbers engraved on paper, or electronic entries in an account, but they’ve got to be there if the check is “good.” So the question arises, at least in my mind: Where are the numbers that comprise the three trillion for the bailout?

The general expectation seems to be that the government will provide the three trillion. In fact, this seems to be taken for granted by the assorted television pundits. But does the government have three trillion in some petty cash account, just waiting to be spent? Perhaps it does, but if so, it won’t admit it. Can the government be expected to receive three trillion in surplus income in the foreseeable future? That’s unlikely. In truth, the government professes to be trillions in debt itself, so looking to it for a loan is hardly reasonable.

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