DON’T get out your calculator unless you’re comfortable with scientific notation, or your calculator has at least 15 digits in the display. The total is $4.3 trillion or $4,300,000,000,000.00 or 4.3 x 10E11 (4.3 times ten to the eleventh power).
The following video clip from the Nov. 25, 2008 MSNBC Rachel Maddow Show demonstrates just how big this financial crisis is getting to be. The part of the 10 minute segment I want you to watch starts at about 2 minutes 40 seconds and runs about 1 minute 3 seconds to 3 minutes 43 seconds into the clip. If you’re not interested in the whole segment you can fast forward to that time and stop watching after it.
So, let’s review: the Bush bailout is costing us, the taxpayers, adjusted for inflation, meaning in today’s dollars, more than
- the Marshall Plan
- the Louisiana Purchase
- the Race to the Moon
- the Savings and Loan Crisis
- the Korean War
- the New Deal (the one from the Great Depression in the 1930’s)
- the Iraq War
- the Vietnam War
- the total lifetime budget of NASA
COMBINED.
Add all those costs up after adjusting them for inflation to today’s dollars and that’s what this bailout is costing us. Let that context sink in because it gets worse and it’s important to have somewhat of a grasp on the situation before we go on. Maybe it’s more like a realization about how little of a grasp we can get on it?
Now, realize that even more money has been committed to the financial crisis since the $4.3 trillion was calculated. The amount as of November 26, 2008 is $7.8 trillion. We’re only about $800 billion from doubling the cost of the above events (that would be $8.6 trillion). See the sources section below for a link to the new article. There is a big chart that explains the situation very well.
As always, please leave your thoughts in the comments below.
Trying to understand WTF is really going on,
Sherri
Other Sources:
Bailout Nation by Barry Ritholtz which will be coming out on January 15, 2009. Barry Ritholtz is CEO and director of equity research at FusionIQ.com, an online quantitative research firm. He regularly appears as an expert on CNBC, Bloomberg, Fox, and PBS, and he is the author of the topranked financial blog, The Big Picture, hailed by The Wall Street Journal as “what the in-crowd knows”.
You can get your copy of the book here:
$7.8 Trillion Total Bailout Commitment
by Barry Ritholtz
The Big Picture, November 26, 2008
http://www.ritholtz.com/blog/2008/11/78-trillion-bailout/
Technorati Tags: 2008 economic recession, bailout, bailout compared to past events, Bailout Nation, Barry Ritholtz, Rachel Maddow
November 29th, 2008 Posted by joubess | Economy | 12 comments
Debt balances:
- Dentist (broke another tooth): $415
- Attorney: $449
- IRS: $2,581.27 (TY 2007)
- LDR: $2,735.00 (Louisiana Department of Revenue, TY 2007, no payments scheduled yet)
- Chase HELOC: $4,742.82 (couldn’t pay this month)
- CFCU Visa: $4,987.86 (could only pay $85, still owe $65 for Nov.)
- Capital One HELOC: $21,434.99 (going on 2 months behind)
First mortgage balance: $116,476
Debt Balance excluding co-signed student loans and first mortgage: $37,346
Total debt including first mortgage, excluding student loans: $153,822
Student Loans:
- Co-signed student loans, approximate balance: $40,001 (got a letter this week from these folks; need a complete audit on these accounts; not sure this balance is correct)
Possible total balance including 1st mortgage: $193,823
Discussion
Man, when it rains, it pours. Another molar broke but the dentist was able to fill it with composite (an epoxy-like material) and that only cost $207 more. Now I owe my dentist $415.
I had a humiliating experience at Walmart this week. I was ready to pay for my groceries after checking out and found there wasn’t enough money in my checking account to cover the full amount of my grocery bill. I couldn’t think of anything that was supposed to have come out of my account that I didn’t account for in my balance, but obviously, something had been deducted. I later remembered it was my water/sewer bill. I had to give back items until my debit card was approved.
Now I know why people sort items on the conveyor belt in order of necessity rather than in order of where they go in the house once you get them home. I’ve seen that happening more often lately than ever before, and now I’m going to have to start doing it myself until I can get my income up again.
Income Is Down
Tutoring income has absolutely sucked since Hurricane Gustav in September. This month is better than October, which was better than September, but I’m nowhere near making what I was at this time last year. I’m not even making what I was making over the summer. I suppose people are cutting back on tutoring to save some money. It is expensive, especially when you go through a tutoring company. I made $640 tutoring in November. Other income amounted to $1,500. $2,140 in one month for two people puts us at just 183% of the poverty level. I made $1,805 in October (155% of the poverty level) but had a little bit left over from making good money over the summer as a cushion. The cushion is now gone.
I am distributing fliers of my own and I’ve picked up one regular student outside the company I work for, and that pays better. I also picked up a one-time client who was preparing to take the GED and wanted a quick math review. I had to lower my prices to get private clients. I was charging $45/hr, and now I’m charging $25/hr. It’s either that or I can’t pick up hours. My tutoring company has finally increased my number of students and I worked 8 hours over Thanksgiving week. I usually don’t have any hours Thanksgiving week because school is out. But this year it seems everyone is trying to get a jump on studying for mid-term exams.
Now that gas prices are back down, I was going to go back to pizza delivery since mowing season is over for a few months down here. Unfortunately, people aren’t ordering pizzas as much either, so there aren’t any delivery jobs available immediately. They’ll call me when they get an opening.
WordPress consulting and website building are still start-up endeavors. I earn at least a few hundred dollars a month from them, they take less time than anything else I do, and I get paid a lot more for them. I’m working my hardest on increasing these revenue streams.
I’m putting out fliers to local businesses who don’t have websites to see if I can drum up some more website work. I go through the yellow pages and call businesses who don’t have a website listed in their Yellow Pages ads and that I can’t find a website for when I do local searches. Every business at least needs a one-page website with their name and logo, address, phone and fax numbers, email address and a map to their store. Once built, a WordPress site is easy and very cheap to maintain, about $10/month.
Late Payments
Because of decreased income, I’m behind on my Capital One HELOC by two months. I paid late in September and didn’t have enough to make a payment in October or this month. I will have to remain behind until I can make up the money to bring it current. I’m also a month behind on my Chase HELOC now, and I couldn’t make my full Visa payment this month either. I couldn’t pay my dentist and I couldn’t pay my attorney.
The only things that were paid were the first mortgage, the utilities, prescriptions, food, one tank of gas in the car, $30 in web costs for my online businesses, and the IRS.
More Cost Reductions
I found out that I can get my telephone service through my cable company, who already provides our internet service, for $9/mo. I’m shutting off my phone service with the phone company and moving it to my cable company. I get to keep my number and it will save us another $20/mo. The $10/mo plus tax phone bill I was supposed to have through AT&T turned out to be $35 by they time they were finished adding everything up.
I’ve cut our grocery bill about in half. We are eating beans and rice, spaghetti, mac and cheese, and tuna along with cereal and sandwiches a lot. We’ve also started eating one breakfast food meal for dinner every week. My son loves pancakes for dinner. I love it that they are cheap to make.
I made an 11 pound turkey for Thanksgiving, mashed potatoes and gravy, and a pumpkin pie. After removing the turkey from the bones, I put them into the stock pot and they are simmering as I write. We are having turkey and sausage gumbo for supper tonight and left overs for the next couple of days. Then I’ll freeze any left over turkey for dumplings later this month. Gumbo freezes well and I’ll make a supper-sized meal of it to freeze along with some individual meals for something quick when we’re short on time.
We don’t get the newspaper, but we’ve scoured recycle bins on our street for the coupon sections of the Sunday paper, and I’ve increased the number of coupons I use. Every little bit helps.
Medicaid and Food Stamps
With my income so low for so long now, we qualify for Medicaid, and I’m signing us up. We do not qualify for food stamps because my income exceeds the 130% of poverty level maximum for a family of two. We may have to visit the local food bank if I’m short on money to buy food.
I know many of you feel accepting Medicaid is wrong, but here’s what’s really wrong. We can’t buy our own medical insurance, even if we could afford it, because of pre-existing conditions. I am an able-bodied scientist with a degree in chemistry and I can’t get a full-time job in the field at all. I hope some new jobs will come around in chemistry here as oil and chemical companies ramp up work on green technologies, but I’m not holding my breathe. I have my resume up-to-date and all my contacts contacted that I’m looking. I know there will be more interviews soon, but getting the job seems to be the problem. I have too much experience to get an entry-level job. They just won’t hire me for one. Temporary jobs used to be relatively available 5 years ago, but they also dried up as companies cut costs.
I am waiting to see if I will be hired into the local school system for the 2009-2010 school year as a chemistry, physics, biology, environmental science or math teacher. I would substitute teach these subjects, but I earn much more per day tutoring them. They only pay degreed subs $50/day while salaried teachers make $40,000 per year plus benefits starting out, and only work 9 months minus school holidays plus 2 weeks before school starts and 2 weeks after school ends for classroom set-up and clean-up time (I estimate 1560 hours per year). That comes to about $26 per hour for the time spent at work at school. You work for the county, so pay raises come annually and are tied to inflation as well as performance. Subs with college degrees only make $6.25/hour. Huge difference.
I usually have 3 or more students per evening, so I earn $60/day minimum tutoring, and $20-$25/hour. I also work 6-7 days per week during mid-terms and finals months, so my income goes up at the end of each semester. Why not do both? Subbing overlaps with my tutoring hours.
I earn money working other jobs during the day, so subbing isn’t worth the time to earn just $50 when I can earn at least $80. It’s especially lucrative when I can get consulting or website clients. When I deliver pizzas I do it during the day if possible or after tutoring, so about 9 p.m. to 1 a.m. I earn a minimum of $50 in tips for 4 hours of brain-dead easy work.
Lots of things are seriously broken when you can earn more delivering pizzas and tutoring than you can being a substitute teacher. BTW, they pay non-degreed subs (read babysitters) $35/day ($4.38/hr), so think about what that means when your kids have a substitute teacher. The person babysitting them at school earns less than you probably paid your own babysitters when those kids were little. They certainly earn less than people who work at fast food chains for the minimum wage.
Goals
I am going to set the following goals to achieve over the next 3 months.
- I am going to quadruple my passive online income from a steady $125/month to at least $500/month.
- I am going to quadruple my active online income from $200/month to $800/month.
- I am going to get my tutoring income back up to $1,100/month.
That will put us back up to nearly 250% ($2917/mo in 2008) of the poverty level for a household of two. We will still remain on Medicaid and we’ll have to pay a small premium once we exceed the 200% of poverty level income threshold. I hope by the time my income exceeds 250% of the poverty level that President Obama’s health care plan will have passed and we will have access to medical insurance on a sliding scale based on our income.
I know you hard-core Dave Ramsey folks are dead set against national health care, but you fail miserably at solving my household’s problem of not being eligible for insurance at any price, let alone affordable insurance. I should be able to purchase reasonably-priced health insurance even though both my son and I have chronic, pre-existing medical conditions. Today, that isn’t possible.
Technorati Tags: debt free or bust, debt report, november 2008, tough economic times
November 28th, 2008 Posted by joubess | Debt Reports, Economy | 13 comments
