Perspective on the bailout

Sullivan points to a comparison of the bailout, in inflation adjusted dollars, to past gigantic expenditures and finds that the bailout is costing more than all of those combined. The numbers:

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion

So far $4.6165 trillion has been committed towards the bailout.

However, I think the comparison is specious. Unlike most of those other things, the money is being invested--in other words, the United States is essentially nationalizing a significant chunk of the financial industry. The real "cost" will be the difference between what we paid for that ownership and what the upside will eventually be when the government withdraws its stake. This cost will undoubtedly still be very very high, but it won't be anything like four and a half trillion dollars.