The Economic Equivalent of War; Cost; $3.3 Trillion

"In any case, the large government intervention is prima facie evidence that by this time the public had lost confidence in the self-correcting powers of the financial structure."
Ben Bernanke, "Essays On The Great Depression" (Princeton University Press, 2000)

Yes, saving the global financial system from chaos was hugely expensive. The price was 23.5% of the nation's annual economic output, spread about domestic and foreign financial giants as well as iconic corporate empires requiring assistance to continue operating on a day-to-day basis. Sure, you should be shaken to annoying rage that it required suing the government to find out where this fortune in taxpayer money ended up.

It's a tad embarrassing, too, that fast food franchise McDonalds ( MCD - news - people ), and the Japanese giant, Mitsubishi, were short of cash on hand. More instructive and revealing were the needs of Morgan Stanley ( MS - news - people ) and Goldman Sachs ( GS - news - people ) to touch up Uncle Sam 100 times and 84 times respectively for some spending money. Why some private citizens were invited to borrow funds cheaply to take a flier on the recovery of distressed assets is another query I'd like to see answered ASAP.

Overall, however, you and I should be grateful to Big Bucks Ben Bernanke, the Fed chairman who took on the ultimate responsibility of acting as the lender of first and last resort to U.S. banks, foreign banks and U.S. corporations. This was, you might have forgotten, what former Treasury Secretary Hank Paulson called "the economic equivalent of war.""In any case, the large government intervention is prima facie evidence that by this time the public had lost confidence in the self-correcting powers of the financial structure."
Ben Bernanke, "Essays On The Great Depression" (Princeton University Press, 2000)

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