So where would we get the 40 trillion??
I had a better plan back before Tarp and Stimulus.
Housing collapse
All the banks got their toxic mortgages covered but other than saving the banks it did little else. The Gov could have bought all the toxic mortgages and refinanced them with a bit of taxpayer money. The total of all subprime mortgages in the US in 07 was just 1.3 trillion. Say the US Gov just ate half of it and lowered the payments or gave a 1 year grace period. After a few years they could sell these repackaged mortgages back to the banks. Even at a fire sell price they could get $400 billion for them.
Total eventual cost $250 billion - Banks OK, Stock market OK, Homeowners OK - Check
Employment
The crash caused 8+ million job losses exacerbating the mortgage crisis even further but let's assume step A was implemented. Let's also assume that Step A cut the job losses by 50%. That's 4 million people out of work. Say the Gov hired all 4 million into the XYZ work program and paid them $30k a year. That's $120 billion a year. The Gov offers the 4 million employees to businesses at a cost of $15k per year. The program is able to place 75% earning the Gov $45 billion making the total cost $75 billion per year. The program runs 4 years
Total eventual cost $300 billion - unemployment fixed, consumer demand fixed - Check
Slip through the crack money
Assume there was still at risk mortgages tanking the housing industry or job losses from unseen areas....double the above
Total eventual cost $550 billion
Total of all $1.1 trillion over 4 years
But wait!!!!
Without all the losses by the financial ind and unemployment, the federal tax receipts wouldn't be down. In fact they would be up. Suddenly, the $275 billion a year in cost is like $100 billion.......maybe zero billion.
Seems kinda screwy that a couple of trillion dollars has been spent in Tarp, Recovery act and revenue losses and not a damn person was saved other than the fat cats. When a bank gets 30 billion from the Fed and they still foreclose on all the late mortgages.....something is e'ffd up.
Thank you for reading my rant.......