The staggering cost of the meltdown
From a long contribution in the progressive magazine Tikkun, it’s good to remind ourselves of these figures, and what a fraction of that money could have done to solve a number of grave social problems.
John Sanbonmatsu:
“Since last summer, in fact, the governments of the leading industrialized countries have been engaged in an epic behind-the-scenes struggle to keep the global financial and banking system viable. So far, Germany has put up $679 billion to stabilize its banking system; Britain has spent the equivalent of one fifth of its national GDP. Meanwhile, by November of last year, the United States had either spent or assumed financial obligations totaling $7.8 trillion to stabilize the deteriorating financial sector-a staggering amount equal to half of this country’s annual GDP. But even that has not been enough to stanch the blood of capitalism’s hemorrhagic fever, which has raged on into the new year. In February-even as President Barack Obama (the national candidate of “hope” only months before) was bluntly warning of “catastrophe” if Congress failed to approve his $700 billion economic stimulus package-his new head of the Treasury, Timothy Geithner, announced a new plan committing the United States to an additional $2.1 trillion to stabilize the system. The Dow Jones plummeted an additional 4.6 percent on the news.
As of spring 2009, the leading capitalist states in Europe, North America, and Asia have thus either spent outright, or exposed themselves to financial risks totaling, well over $10 trillion-a figure so vast that one searches in vain for any relevant historical parallel. By comparison, the entire Marshall Plan to rebuild Europe after World War II cost a mere $9.3 billion (in constant 2005 dollars). According to the United Nations, it would cost $195 billion to eradicate most poverty-related deaths in the Third World, including deaths from malaria, from malnutrition, and from AIDS. So the amount of money committed by policymakers to save capitalism from itself is already fifty times greater than what it would take to save tens of millions of human beings from terrible daily suffering and premature death.
If the wealthy nations instead invested that $10 trillion into the economies, health systems, and infrastructure of the Third World, rather than transferring it to the world’s richest banks, private financial institutions, and investors, they could usher in a new epoch in the history of the species-a world community in which every human being would be guaranteed a livable life.”