What’s $700 Billion Worth?

Call it sticker shock. Across America, folks are outraged at the government’s rescue plan for the nation’s financial system. I understand-$700 billion is a lot of money.

But let’s get some perspective. Some estimate that the United States will spend more than $400 billion this year alone on foreign oil. So $700 billion is less than what we will be spending on foreign oil this year and next, putting money in the pockets of the likes of Saudi Arabia (which is an exporter of extremist Wahhabi Islam) and Venezuela (whose volatile leader, Hugo Chavez, makes no bones about hating the United States).

Talk about a transfer of wealth-it’s a bailout! Given the vast stores of oil off our shores and up north in Alaska, we don’t have to be pouring that much money overseas for oil. Finally, Congress has yielded to the will of the American public and has let the ban on offshore drilling expire. Good. Let’s start drilling and begin to make a dent in the $400 billion we send overseas each year.

That’s $400 billion that goes up in smoke, but in the rescue plan it is $700 billion actually invested in assets. That’s not a bailout. The government will be purchasing troubled mortgage-based assets at depressed prices. These are assets that are now currently clogging the nation’s credit system. And remember, if we don’t do this and the credit system shuts down, businesses and individuals will find it hugely difficult to get loans, and the economy will grind to a halt. The cost of such an event would be incalculable.

The key here, as many financial analysts have pointed out, is that the U.S. government, and hence the taxpayers, actually stand to profit from this plan. When-not if, but when-the housing market stabilizes and recovers (as it always has), the government can then sell those assets it purchased in many cases, perhaps most cases, at a profit.

So people are outraged about buying mortgages, but they seem indifferent to the fact that we’re sending $400 billion a year overseas for foreign oil.

Yes, there is risk involved in this plan. But one man’s risk is another man’s opportunity.

Just ask Warren Buffett. His company, Berkshire Hathaway, has just invested $5 billion in the investment bank Goldman Sachs. Buffett, the nation’s premier investor and bargain hunter, is no fool. He knows an opportunity when he sees one. The Times of London reports that, on paper at least, Buffet’s investment in Goldman Sachs has already appreciated over $700 million dollars.

As this financial crisis spreads uncertainty throughout the markets and across Main Street, there’s another opportunity on the table-that opportunity that we Christians have to witness to our neighbors.

How you react to this crisis-in conversation with friends, in helping a family in trouble, in how you live within your means-will speak volumes about the confidence you have in Christ and in the sovereignty of God.

Now is the time for the Church to do as it has always done in difficult times: to reach out to those who are hurting, to give hope to those who fear, and to point to the God who owns “the cattle on a thousand hills.”

Now there’s an opportunity we dare not miss.

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  • This is nothing more than government take over in the name of bail out. Don’t you think companies like J.P. Morgan are available to buy this out. Buffet, Gates and many other large companies will step in if it is a good deal. Big government should stay out of this just like parents have to let their kids fail. How else are going to learn from our mistakes of over extending, indulgence & sinful over spending. We killed many of our new consumers thur abortion and yet we expect our compaines to grow and pay big dividends it has to stop and a socialist government is not the answer. The next thing will be communism, I don’t want to give my freedom for the big businesses who went astray. We need to elect people who will serve the people. We need to completely replace the House and the Senate. May God Be Praised!

  • Richard Bell

    I find these measures troubling for the simple reason that the financial system’s dependance on easy credit is what got us into this mess, and the $700 billion is targetted to allow the continuation of easy credit. Bush’s speech was all about getting the easy credit machine going again, so that we can return to business as usual. However, this crisis is the writing on the wall that easy credit cannot be infinitely prolonged. Eventually debtors must repay the loans. If the average Joe american can be convinced of this, then they may finally elect politicians who will apply the same principle to government.

  • heinz

    Socialism, if it remains truly Socialism, even after it has yielded to truth and justice on the points which we have mentioned, cannot be reconciled with the teachings of the Catholic Church because its concept of society itself is utterly foreign to Christian truth.
    -Quadragesimo Anno

    I might also mention that The Wanderer this week had an interesting article on their home page. I just skimmed through it and will need to take a closer look at it tomorrow. The website is thewandererpress.com.

  • Fannie Mae and Freddie Mac are in such huge trouble because they were federally chartered companies that could be coerced, at Congress’ discretion, into giving up sound business practices for the political gains of incumbents. How on earth are we to expect that they will do any better, now that they are far more directly under Congress’ control?

  • Dave

    Government use of money taken from it’s citizens has become progressively insane, to the point that we are becoming numb to the outrageous.

  • trailblazer

    “When-not if but when the housing market stablizies and recovers (as it always has)…”

    I appreciate the analysis but me thinks it fails to take into consideration the moral and hence spiritual reality before us. This day is not business as usual.

    There is only one solution to the unravelling taking place and that is repentance and prayer. Short of a spirit in the land of repentance and prayer the outlook for our Country, previously so greatly blessed by God, is economically dire. God detests the mountains of idolatry we have accumulated and hears the cries of 48,000,000 or more souls whose blood has been spilled on this land.

    God cannot and will not continue to bless such an outrageous and mocking display and God is, despite opinons or observances to the contrary, sovereign Lord. As scripture says, “For Yahweh reigns, the ruler of the nations (Ps 22:28)” or, “All the nations are as nothing in his presence, for him they count as nothingness and emptiness (Is 40:17)” or, again “I sahll make th earth shake once more and not only the earth but heaven as well. The words once more show that since the things being shaken are created things, they are going to be shaken so that the unshakeable things will be left. We have been given possession of an unshakeable kingdom. Let us therefore hold on to the grace that we have been given and use it to worship God in the way that he finds acceptable, in reverance and fear. For our God is a consuming fire.(Rev:12:27-28)”.

    Jesus says, if your eye offends you, pluck it out. To me this suggests, among other things, that God in His great mercy and love is willing to let a nation fall into their own darkness and suffer the consequences of the weight of so much sin in order to hopes they might realize their only true destiny is eternal and repent and return to the hope that is ours in Christ Jesus.