Memo to journalists -- as Kevin Drum points out, the cost of the various financial bailouts, loan guarantees, etc. are being wildly inflated in press reports:
This stuff has gotten completely out of hand, with "estimates" of the bailout these days ranging from $3 trillion to $7 trillion even though the vast bulk of this sum comes in the form of loan guarantees, lending facilities, and capital injections. The government will almost certainly end up spending a lot of money rescuing the financial system (I wouldn't be surprised if the final tab comes to $1 trillion over five years, maybe $2 trillion at the outside), but it's not $7 trillion or anything close to it. People really need to stop throwing around these numbers as if the bailout is comparable to World War II or something. That's not reality based, folks.
Josh Marshall made a similar point:
We've heard a number of reports over recent days putting the total government bailout costs at several trillions of dollars. But there are a lot of apples and oranges being thrown around. There are directly appropriated US government spending on the TARP. Then there's Fed lending, which is different. Then there are various loan guarantees and agreements to backstop questionable assets. These are all very different kinds of expenditures and some of them don't even really count as 'spending' in the ordinary sense we understand the term. To start disentangling the mess, we've put together an initial run down of the many different kinds of spending, loans and loan-guarantees and what the amounts are with each.
This is one of those times when it would be really helpful to have a numerically literate press corps (see also the post above).