I just read that the sum of the US financial crisis is equal to New Deal, the Marshall Plan, Korea war, Vietnam War, the Iraq invasion, the Apollo program (including all take offs) and all Nasa investments since. That seems to be a lot of money. – Can it be true?
The source is a small note in the (paper version of the) reputable Swedish newspaper Svenska Dagbladet (not in the web edition), which is quoting the Danish source Weekendavisen. I have not found the original piece.
Sure it could be true - if you don’t account for inflation.
The Apollo program cost a grand total of $25 billion. That’s not even rounding error.
I’m not sure how much the New Deal cost, but the Marshall Plan cost about $13 billion, the Korean War $30 billion, Vietnam $110 billion, the moon shot about $25 billion, and Iraq is now heading north of $700 billion (noting that Afghanistan war costs would be another $300 billion, approximately).
So, excluding the cost of NASA since the 1960s and the New Deal, that’s just a bit under $900 billion. The cost of the stimulus bill alone was about $800 billion (including the tax cuts), so, draw your own conclusions.
Now, if you start adjusting numbers for inflation, Vietnam cost about the same amount as we have spent in Iraq, Korea cost about $350 billion, the Marshall Plan about $110 billion, and the moon program somewhere shy of $200 billion, so we’re already at a trillion and a half dollars there. That’s about the size of this year’s deficit.
What is the cost measured in?
So far the responses have looked at just the cost in terms of tax dollars or government expenditure. But we could also look at the total economic cost - reduced stock values, reduced home values, lost jobs/wages, bankruptcies, etc. From that perspective, I have no doubt the total cost is higher than the government programs mentioned, even if you adjust them for inflation.
(Unless, of course, you count Social Security as part of the New Deal. In which case, the New Deal is just about the most expensive thing ever, and getting more so every year.)
There are some interesting (and mind boggling) numbers here. Thanks for sharing you knowledge.
Did you mean cost in the sense of cost to the government? The stimulus package would count, but a lot of the bailout money is getting paid back, some with a profit, so you just can’t add the original cost of the bailout to that of the stimulus package.
But I agree with dracoi that the real cost is in lost asset value, lost opportunities, and psychological costs. That would be very hard to measure, since it doesn’t seem fair to count a decline from an inflated house value as a true cost. Has anyone seen an attempted accounting of this, which would be similar to the accounting of the true cost of the Iraq war done a few years ago.
This article should put the cost in stock losses into perspective: $1.2 trillion lost just on 9/29/08. And a sidebar on the same article shows that 3 of the 10 biggest single-day losses were in September 2008. I don’t have a good number for total losses, since the market tends to do a lot of up and down over time, but it seems like 30% overall loss in stocks is about right - that would be about $4 trillion.
How about real estate? This article says $3.3 trillion in real estate lost in 2008 alone.
I don’t mean anything. It was something I read, and since I too had some questions I tried to find the original source but I didn’t. I guess, though, that they meant “cost to the goverment”.
I don’t suppose we’ve even seen the beginning of this. We keep hearing how the European debt crisis is hindering the recovery, but it’s a different story if you check out the news sources from over there. Both France and Germany enjoyed hefty GDP gains in the past quarter, and Germany now has apprenticeships and other entry level positions going begging, to the point that loosening up their immigration and foreign work permit rules is being seriously discussed. To have a stable or slowly declining population and increasing exports and GDP seems to me to be a workers’ paradise, especially in an economy characterized by generous benefits and strict labor laws. Contrast that with America’s galloping population growth, moribund manufacturing and exports, a consumption based economy, and a job market that has failed to keep up with the population for several years now. The cumulative total cost of the resulting under- and unemployment, especially on the young, may well stagger the imagination in the end.
But every one of the events mentioned in the OP had staggering amounts of effects, good and bad, that could be taken as costs.
How can you even approach the question at all except to equate like to like and calculate only the actual dollar figures in the federal budget directly attributable to them?
Otherwise you’re into almost nonsensical levels of philosophizing by trying to compare the positives of the Marshall Plan against, say, the negatives of Vietnam.