What $700 Billion Could Buy

We’re spending $700 billion to bail out the idiots who got us into this mess, and we end up with nothing to show for it but the bag we’re left holding and maybe a disaster averted (we hope).

We could be spending a lot less to get a lot more. A national Wi-max buildout would cost between $5 billion and $14.5 billion. That would enable every American to get high-speed access to the internet and to its education, commerce, connectivity, innovation, jobs, and value. With a lot left over.

Or take the $700 billion and divide it by America’s 114.5 million TV households. Minus the 40-percent-plus margin that cable companies make on internet access (that’s the number I heard from them), we could provide broadband access to every one of those homes for about $300 a year. That means we could give every American free broadband access for 20 years.

We could buy 3.5 billion One Laptop Per Child machines. Want world peace and understanding? Give one to every Muslim on earth and every citizen of China (or since China can afford them, make that everyone in India or everyone in Africa and South America combined) and you’d still have more than 500 million machines left over.

Or we could give 4.4 million Americans free college educations at private institutions. We could give 23 million Americans free college educations at public institutions like mine. That alone would improve our competitive position and transform dying industries.

Or we could more than triple total annual R&D spending in the U.S. I can’t find total R&D on alternative energy but with this money we could multiply what Google.org is spending by a factor of 35,000.

Of course, these comparisons are specious. We’ll see a lot of op-ed charts that make such apples-and-kumquats correlations. The point will always be the same: Where are our priorities? Where are we investing our money?

And what are we getting out of spending this $700 billion. We, the people, damned well better make demands on our representative to set something for our money.

Tom Evslin has a good list of suggestions that would in some ways treat the bailout like a bankruptcy reorganization. Robert Reich has a similar suggestion for a “giant workout of Wall Street.” Here’s Don Tapscott calling for unprecedented transparency. These are about extracting a pound of flesh for our ton of gold.

But I also want something about investing in our future and the economy: broadband access, technology, education, R&D, something that will build the future rather than mortgage it.

: LATER: Says Umair Haque:

The time is now.

Now is the time for revolutionaries to step up and build something better, something more real, and something greater.

There will probably never - at least in our lifetimes - be an opportunity for total economic reinvention this tremendous.

Comments

[WEBISKING:]

The United States government needed to take these measures in order to avert a major financial crisis around the world

If you are long a position you must reveal your investment.Short selling should be the same

The naked short rule was never enforced and without getting into details or naming names this action was sorely needed

Many Americans who worked hard at Lehman and others were financially crushed by the mistakes of Jimmy Cayne and Stanley O Neill Richard Fuld Angelo Mozilo and others.Capitalism like love and war is not always fair.

Destroying the US economy hurts all countries and don't think for one minute central banks across the globe were telling Paulson to do this.Some countries as they were covering their own short positions

Smart money has been covering their shorts for weeks now and contrary to the outrage you hear from Chanos and others they knew as me and my partners did that this day was coming

This summer this ban was put into place but afterwards the rules were flaunted and like reckless behavior of those who spawned the sub prime crisis

The same reckless shorts got to full of themselves and started tearing down the system they claim to protect. Certain firms were attacked by shorts who were not bound by any rules

The uptick rule is not feasible contrary to Jim Cramer's rantings .Trades happen much faster now and AIG traded over a billion shares the other day . This is not 1988

Shorting is not made illegal and those who continue to short bloated pigs will still be allowed to as long as they follow the naked short rules.Short selling is a necessary part of the market but personal freedoms that kill the goose who lays the golden egg benefit no one

There is a boatload of money on the sidelines and the housing and credit markets need its infusion

Bernancke is ten times the Fed leader Greenspan was

If the doctor told you to change your eating habits or die

Would listen to him or continue to say no one is going to regulate my diet

US Government made 3 billion on the Chysler bailout when Buffett was not yet a billionaire

Paulson and Ben had no other choice

2008 Sep 21 01:16 PM

[businessguy88:]

Government's robbing the tax payer.. enough said.

2008 Sep 21 06:34 PM

[Brett Cole:]

Your assumption that the $700 Billion is a sunk cost is just that...An assumption. Potentially those illiquid assets could be bought and sold for a minimal loss/gain to private distressed funds with major players as investors.

2008 Sep 21 09:23 PM

[fatcat:]

With proper management by the private sector,this bailout could actually work to our benefit....there are a lot of ifs..

2008 Sep 21 09:41 PM

[Tom B:]

The outlook is pretty bleak. Some of that toxic debt will end up buried forever in a mountain in the Nevada desert-- metaphorically speaking.

My prescription for recovery would include ceasing to blow 12 billion a month in Iraq and make those thugs repay us for our efforts to date out of their oil revenues.

2008 Sep 22 08:43 AM