What would you do with 700bn?

Embedded in the macroeconomic data, we tend to lose the ability to surprise ourselves when we hear the big numbers; 1 billion of USD here another 50bn there. When it comes to bailouts and bank mergers, it is especially hard to have a reference. Oxfam’s Head of Research Duncan Green puts the US financial sector’s bailout into perspective:

700bn USD:

  • Would clear the accumulated debt of the 49 poorest countries in the world ($375bn) twice over
  • Is almost 5 times the annual amount of extra aid needed to achieve all the Millennium Development Goals on poverty, health, education etc ($150bn a year)
  • Is about 7 years of current global aid levels ($104bn in 2007)
  • Is enough to eradicate all world poverty for over two years (UNDP  calculates it would take $300bn to get the entire world population over the $1 a day poverty line).

On the other hand it’s

  • only a quarter of the cost of the Iraq war ($3 trillion on Joseph Stiglitz’ calculation )
  • a half of annual global military spending ($1339 bn)

To keep calculating, don’t forget that the estimated martket value gone right after the House rejected the bail-out plan was much more thant the package itself (about $1.5 trillion).


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