It's not if, it's when. The only question left is how well we implement the bailout. Do we trust the people who led is into this abyss to do it properly? I sure as hell don't, but that's probably what we're going to get. In case I haven't mentioned it in the last ten minutes, McCain's economic team is central to the economic problems we are facing, so don't forget it.
As Bear goes, so will go the rest of the financial system. And if history is any guide, the coming taxpayer-financed bailout will end up costing a lot of money.
The U.S. savings and loan crisis of the 1980s ended up costing taxpayers 3.2 percent of G.D.P., the equivalent of $450 billion today. Some estimates put the fiscal cost of Japan’s post-bubble cleanup at more than 20 percent of G.D.P. — the equivalent of $3 trillion for the United States.
If these numbers shock you, they should. But the big bailout is coming. The only question is how well it will be managed.
