19 June, 2009

The Bailout

I'm not qualified to assess whether this is true or problematic, but some of you might be, and anyway it's really interesting.

From boingboing (hat tip Good/blogs):


Cassady said...

That's a pretty wild illustrator of exactly how big everything has gotten.

There are so many more people, private interests, businesses, etc. in the world--and the world is so much more efficiently connected--that the vast sums we deal with are astronomically larger than the vast sums people dealt with in the 1700's.

No, I'm not really qualified to make sense of this in any meaningful way, but wasn't there a time in the not too distant past that the whole global economy wasn't worth a comparable $50 Billion?

spencer said...

Somewhat predictably (am I too predictable?) I am here to give you some reasons why this graph shouldn't be that shocking.

1) These figures are adjusted for inflation, but as Cassady points out, the world economy used to be a lot smaller. The US economy is about 7 times larger now than it was 60 years ago. And, there are twice as many people as there were 60 years ago. So, relative to the size of the economy, these figures start to look smaller.

2) The figures on the right side are mostly pure expenditures--they went directly into buying stuff (probably guns) or hiring people and are pretty much gone forever. The figures on the left side are loans, which means that they are mostly going to be paid back to the Fed or the Treasury at some point in the future.

But yeah, things are a lot bigger than they used to be.