In case you haven’t seen it, here is CNBC reporter Rick Santelli’s rant on the floor of a stock exchange in Chicago. It’s five minutes, but you should watch the whole thing, it’s worth it.
If you want to know what Santelli is so worked up about, here’s a quick run of some numbers:
This $75 billion program will cost $100 billion because of interest on the borrowed money (and that’s a conservative estimate—do you really think that this program will go away when the current “crisis” is over?).
Let’s say that the average, productive, mortgage paying citizen in his/her peak earning years from age 41-65 pays $5,000 a year in federal taxes. That comes out to $125,000 paid in taxes per person over those 25 years.
At that rate, 25 years of taxes paid by 800,000 productive citizens will go to pay the mortgages of other people. That’s the entire population of Fresno, CA or New Haven, CT.
Many of these people struggle every day to pay their mortgages and their other bills. They now will be required to work for a quarter of a century to pay for the houses of those who don’t pay their mortgages.
And I bet none of them ever get a thank you card.
Or you can look at it in terms of opportunity cost. Social Security, of course, comes from the general fund. That $100 billion could provide a monthly benefit check of $1,000 for 555,000 citizens for 15 years. That money is likely to be gone when the citizens of Greenville, SC or Denver CO try to get it.
Ten billion here, ten billion there, pretty soon you’re talk about real money for which a whole lot of real people work a lifetime.
Also posted at The Rational Conservative