Bailout Tab Response

I found an interesting article on Anna's blog, entitled: "Bailout Tab". We all have heard on a weekly basis how the government has come up with some new bailout program with some interesting name and a cool sounding acronym. Her article caught my interest as I have never really thought of how much the government has spent in total on all the bailout programs, where they are getting all the money from and how they could ever repay all the money.

I found this interesting article in the New York Times that makes a perfect summary of all the money that has been spent and borrowed by the government and where it was allocated. Through April 1st, the government has made total commitments of $12.1 trillion and they have also spent a total of $2.5 trillion. As an investor, the government has made a commitment of $7.7 trillion and has spent $1.4 trillion. Secondly, government as a lender has committed $2.3 trillion and spent $680 billion. Lastly, government as an insurer committed to $2.1 trillion and spent $340 billion. For further details please see the article.

In Anna's blog she asks the question: "But where do they get this money?". The first answer is obviously the taxpayers money. But could our taxes possibly be enough to cover all the bailout expenses and keep the country running at the same time? No, so thus the government creates new money, as Anna also stated in her blog and this results in raising the countrie's already huge deficit. According to deficitsdomatter.org, the US national deficit is currently over $11 trillion and it is constantly increasing. Check out the link it is cool to see how fast the national deficit is increasing every second.

This brings me to another question; how will they ever be able to repay all of this deficit? Anna makes a valid point as she says that the government should not rely on people to repay their loans, as it was these exact same people that defaulted on their initial loans and caused part of the crisis. I agree with her on this point and I believe that the government should have some regulations in place where they can help in guiding the banks to select the appropriate people to lend to. This will in turn lead to the banks receiving some of their bailout funds if the banks become profitable again. When it comes to the remainder of the deficit that needs to be repaid, I do not have any solutions or thoughts, and that is why I am glad that I am not the president. Any thoughts are welcome.