Treasury’s guide on how to spend 12 zeros after the 1
A trillion dollars is a million million dollars or 12 zeros after the one.
And that’s how much apparently every program costs to save the U.S. economy these days.
Treasury Secretary Timothy Geithner outlined what he called “a new financial stability plan” to help restart the flow of credit, strengthen banks, and “provide critical aid for homeowners and for small businesses.”
His proposal included a program in which the FDIC, the Federal Reserve, and the private sector would establish a fund, using government financing, to deal with bad assets weighing on financial firms.
“We believe this program should ultimately provide up to $1 trillion in financing capacity, but we plan to start it on a scale of about $500 billion, and we will expand it based on what works,” Geithner said.
Another piece of his plan would commit up to $1 trillion (there’s that number again) to support consumer and business lending with the Treasury and Federal Reserve working together to “kick-start the secondary lending markets.”
All that is separate from the economic stimulus legislation being fought over on Capitol Hill right now, which is running about $800 billion (add $200 billion and that’s another trillion).
Geithner, who came to the job with a bit of a tax issue in his past, showed that he was well aware of the math for his proposed economic rescue programs.
“Now, many of the programs I’ve discussed involve very large numbers,” he said.
And again. “But I want to be candid: This strategy will cost money, it will involve risk, and it will take time.”
“But as costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families and for businesses and for our nation,” he said.
Photo credit: Reuters/Jim Young (Geithner unveils financial rescue plan)