US financial big buy

Much is going to be made of the US Govt bailout of the banking system. It could prove to be as large as $1 Trillion, that is 1,000,000,000,000 dollars. To understand how big that is would be to give $335,000 to every man woman and child in this country. If you have a family of four that would be 1 and 1/3 million. Not bad, you could live on that for a while, I would guess.

Before you get too mad, Rupert Murdoch made the point that it wouldn't surprise him if taxpayers don't end up paying a dime! What!? Why?

First, take AIG. The treasury is going to provide 85 Bil in loans. Those funds must be paid back. For that they (US Govt) gets an 80% share of a once $Trillion company. If things settle out, and that is very possible, the US makes out. Do the math.

Overall, the US may actually make money (that would be a first) because they are buying many investments that are poor today but could prove to be substantial in the future. For example, lets say that the US buys 500 Bil in housing, which a number of those houses are in trouble, or worse. They get them at 60% on the purchased dollar. They could conceivably go back to their original prices (most likely will within 2 to 5 years). If they reach 100% they just made a bundle. There of course are costs involved with carrying those properties for the space of 2 to 5 yrs, but they still did well for their investment.

Regardless, the Govt must make it painful enough that we don't go down this road ever again. This still has the potential of falling apart.