CALCULATE WHAT THE BAILOUT IS COSTING YOU

What’s it going to cost?

Here’s a handy calculator so that you’ll know exactly what your family’s after tax share of the bailout stimulus spending frenzy will be:

You’ll probably have to click in to the post to calculate your numbers with the widget if you’re reading via an RSS reader.

Pete’s and my share is just over $55,000. Sigh.  Over 30 years, our share grows to $106, 672, more than what I paid for my first house.  I’m thinking perhaps we should just return the $13 per week we were going to get in tax relief, and opt out of participating, eh?  Sure, that’ll work.

Thanks to Debbie for pointing to this.

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Comments

  1. says

    While we are all going to have too much tax debt coming out of this, I think the calculator is over simplistic.

    Some of the money will be loans that will be required to be paid back and not by the taxpayers except in defaults.

    Some of the money will result in jobs that wouldn’t have existed and the workers that get those jobs will be paying taxes where they might not have been otherwise.

    On the other hand, if I’m around to have paid all of our share, I’ll be beating the odds at age 87. ;)

    Mike Goad´s last blog post..Applying for Unemployment — The Rest of the Story

  2. Betsy Wuebker says

    Hi Mike – You’re right, this calculator is an oversimplification of a very complicated structure. And you’re also right, there is some job creation in the legislation. We could probably parse all the components for pros and cons for a very long time.

    But, the fact does remain that this most aggressive spending plan creates an enormous burden on generations of future taxpayers. It also increases the federal deficit to unprecedented levels. Where are those who were so critical of the previous Administration in the very recent past? Most of them, inexplicably, are now on board with this bill. Where was the transparency Obama promised? This bill was fully read by no one who voted for it, and was not read by the One who signed it. It was rushed through a modified, secretive process because of the emergency, and then sat on the President’s desk while he went on a President’s Day weekend holiday. The most this seems to elicit by response is a collective shrug. Whatever.

    It would appear that the only way out of the current situation would now be: a) protracted war (a la WWII getting us out of the Great Depression – which economists believe was exacerbated by interventive federal policy); b) unprecedented accelerated increases in our GDP (problematic in terms of the unemployment/employment ratio, and limited access to credit for companies struggling to maintain or create production); or c) increased money supply, which raises the specter of runaway inflation, much like in the late 70′s.

    While there are provisions in this legislation that will create a positive impact, most of them do not go into effect for two or three years. By then, the economy may have already righted itself. Establishing additional tax and spending burdens on a struggling economy and renaming that as stimulative is spoon-feeding fallacy to the public. The life-ring many are wishing for may instead by a bag of bricks, well-intentioned as it may be.

    The other thing worthy of mention is that this number won’t include additional spending and taxation. It won’t stop with this legislation. The citizenry can’t afford the yoke of this kind of government.

  3. says

    How does that figure compare with what the average family would have spent over that time if they hadn’t been frightened out of spending by the recession? After all, consumers pulling back from purchasing is definitely a part of the reason for the layoffs. I’m not good at economics, but Mike’s comments make sense to me, too.

    Dot´s last blog post..OpenOffice Extensions

  4. Betsy Wuebker says

    Hi Dot – Good question, but would have spent over that time on what? In our case, the number equates to about $300/month over 30 years. So, this additional tax burden is the equivalent of our current monthly grocery bill, or a car payment. I’d rather support the auto companies with a car payment. But overall, my point is, I don’t have that choice, do I?

  5. says

    I knew when I saw the title of this blog post that I was going to be depressed by what I saw here. Little did I know you’d feature a calculator to put a cold hard figure to what I already suspected.

    I could put TEN kids through college with my “contribution” to the bailout – or go on 66 vacations. Gee, since I haven’t been on a “real” vacation in 10 years, I guess I’d better book that cruise – cuz when this is over, I won’t have a pot to piss in or a window to throw it out!

    Kathy | Virtual Impax´s last blog post..Social Media is Simply Communication on Steroids

  6. Betsy Wuebker says

    Hi Kathy – It can be depressing or reassuring to contemplate equivalents in cost. When I worked on school referendum committees, we would always try to break down the individual household tax bite into monthly increments: “for the cost of a pizza, we will have new technology in all the elementary schools,” etc. Families prioritize spending on equivalencies all the time.

    I found this article extremely helpful: “What Keynes Really Said” http://blogs.harvardbusiness.org/hbreditors/2009/02/should_we_all_be_keynsians_now.html Basically, the takeaway is this: while Keynes has fallen in and out of ideological favor, he correctly points out that consumer spending is a function of income, and producer spending is a function of interest rates. Changes to either income or interest rates will affect the GDP. Deflationary periods require deficit spending to avoid a death spiral. So, we’re after inflation here. Keynes observed that pushing on one aspect of the economy affected others. (Duh.) The original context Keynes worked in was the world in 1935.

    The article goes on to say that every business cycle has brought a re-evaluation of Keynesian methodology: the process of tweaking incomes via lowering or raising taxes, and the process of setting interest rates to countermand inflation or deflation. There have been some terrific successes when our government has used the theory to apply policy (1965) and some notable failures (the 1970′s).

    All this really confirms is that it’s a crap shoot at best. And, remember, as two of the legions of the self-employed – your and my landscape has its own set of affects. Where is Alfred E. Neumann when you need him? :)

  7. says

    Well, the calculator is simplistic but kind of fun to look at….we have always paid huge amounts of taxes. So $300,000.00 seems about right…I was thinking in that ball park…in 30 years I will be in my 90s or not here….We pay $1000.00 a month for health ins. with a $5000.00 deductible and have paid off $261.000.00 for child’s needs and surgeries….We just figure we will keep paying and paying…

    I still wish I could close down Wal mart(I now see they are branching into banking here in our state) and get rid of Tide….but it is nice to know that we help kids have health care, libraries, and we try to keep salmon in our rivers…..

    We just try to do our very best for everyone we are able to assist or help and keep 12 families in their homes and fed….

    Patricia´s last blog post..Diva Model on the Runway – Heads Up!

  8. says

    Hi Betsy – That is a lot of money. I wish someone would work out how much it will cost uk taxpayers to save our banks. The annoying things is, our government has bailed them out, but they won’t give loans to people, even though they’ve been told they must do so.

    I got an email from a friend yesterday who is really struggling, as her husband lost his job. He got a new one quite quickly, but they got into trouble in between times and the bank just won’t help her out at all.

  9. says

    I learned a lot from Mike Goad’s comments, he is such a smart and nice guy.

    My hubby is a real smart guy and he says it will affect our daughter’s great -great grand children.

    I do understand that there have to be lending institutions but I think it is up to consumers to not buy thing they can’t afford. (me included.)

    Jannie Funster´s last blog post..Bristles on a stick

  10. says

    Hi there Betsy – well you ARE lucky ducks! I don’t think we’ll be getting anything here in ‘stralia (actually there is a stimulation package of some sort happening – remains to be seen what they spend it on).

    Cheers – Robin

    Robin´s last blog post..Finding Our True Selves

  11. says

    With respect to Robin’s comment, (and as an Aussie away from home, it’s always nice to hear comments from fellow Aussies), Australians are in a somewhat fortunate position in that Australian taxpayers, unlike our US and British counterparts, have not yet had to finance any major bailouts within the finance sector at this point.

    Hopefully, from our point of view, things stay that way.

    With respect to the American rescue package, frustration on behalf of American taxpayers at some of the huge severance packages they have had to finance for failed executives is more than understandable. If I were an American taxpayer, I would be simply ropeable.

    Andrew´s last blog post..Thoughts for a nation in shock

  12. Betsy Wuebker says

    Hi Patricia – Those of us who are in our 50′s and 60′s or older now are getting off easy by comparison with younger people, aren’t they. I can’t help but think if one wants to do good things with one’s money, it would be nice to be able to make the choice instead of the government choosing. Thanks.

    Hi Cath – Yes, the credit markets remain tight here too, and the newspaper was full of “perhaps we need to nationalize the banks” articles this weekend. It seems as though everything is in stalemate doesn’t it? Thank you.

    Hi Jannie – I agree on the not buying things one can’t afford. I don’t think it’s right that outfits like ACORN are pushing home loans on people when they know they’re going to default. The bad mortgage loan spread is what started the problems. Thanks.

    Hi Robin – Yes, we’re as lucky as lucky can be, chim chim cheree! :D I think it’s interesting to compare the measures our governments are taking, too. Thank you.

    Hi Andrew – You’ve hit on the basic problem: rewarding bad behavior. Why bother behaving or doing things right if you’re going to be rescued from the results of your own actions anyway? Thank you.

  13. says

    Hi Betsy – I read this the other day, started leaving a comment and my computer stalled. Aughhhh!

    The future cost of this bailout is beyond what I can comprehend. I pray it helps to turn around the economy, but without knowing what all is included in the package, it hard to tell. I’m thinking of downloading all 1100 pages and digging in.

    I’m looking at that $13.00 a week “advantage”, but isn’t that only for those who have jobs? What about those who can’t collect unemployment or can’t find a job? I wonder how soon they’ll see some type of relief.

    Barbara Swafford´s last blog post..When Non-Blogger Friends Don’t Get It

  14. Betsy Wuebker says

    Hi Barbara – Yes, I believe the $13 increase is appended to payroll tax. So…as self-employed individuals, well, you know the drill. It’s interesting that now our representatives are “finding” stuff in the bill that they want to amend because it’s detrimental to their constituencies, isn’t it? Thanks.

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