At this moment in time, the Stimulus bill is winding its way through the Senate. A vote is currently expected sometime tomorrow. (UPDATE Feb 10 — The Senate passed their version of the Stimulus Bill today. Next stop is a Joint Conference Committee where differences between the House and Senate versions will be hashed out)
Since the bill the House passed is different than the Senate version, a Conference Committee consisting of members of both the House and Senate will gather to hammer out the differences. Then that version will go to a vote in both the House and Senate. Assuming passage, it will then be presented to President Obama for signature into law.
So currently we don’t know what the Stimulus bill will look like, but most reports are showing it will be in the neighborhood of $900,000,000,000. (That’s 900 billion dollars.)
That is an incomprehensible amount of money.
I went through this exercise back in October when the previous “bailout bill” was passed to the tune of $700 billion.
Let’s try to wrap our minds around just how much 900,000,000,000 is:
There are 31,536,000 seconds in a year.
If you had a time machine and wanted to go back in time 900 billion seconds, you’d find yourself whisked back in time a total of 28,539 years.
Want to talk to Plato? Sorry, he won’t be born for another 26,102 years.
Want to watch the construction of the Egyptian pyramids? You’re going to have to wait about 25,800 years.
OK, so what can you do now that you’ve traveled back in time 900 billion seconds?
Well, since you’d be in the Upper Paleolithic era (aka the Late Stone Age), you might be able to catch a Cro-Magnon man making a cave painting.
But hey, at least the Ice Age won’t start for another 7,000 years.
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Disgusting. Sobering. Frustrating.
Maybe I'll go spend a decades worth of my own earnings and see if it helps my financial picture. Whaddya think? Give it go?
Not sure more money will help. I don't think waiting on the government for more free money is a great idea. We can all just keep working and crank up our effort.
**Joseph Bridges´s last blog post..Sharpen your skills, even the ones you think you have mastered</abbr></abbr>
Jay – love the history lesson – as I teach an intro to humanities course online – it fits well with the way I often explain things to my students!
**Kevin Sandridge´s last blog post..First-Time Home Buyer Tax Credit Unwrapped</abbr></abbr>
Hello all,
Great postings thanks.
I have a question concerning my situation and the original qualifying dates. I bought my house the end of february but was unable to live in it due to renovations so we rented until mid april. I know I am not lucky enough to get free money but I would like to get the 7,500 loan. what is the interprepation of this situation would a renovated unlivable house fall in the same category as constructed therefor allowing me to apply the occupency date which is within the allowed dates. Thanks
If this stimulus package isn't enough or isn't correctly done we may be all getting into our time machines and going back to about oh 1931……
This is an interesting post to contemplate how much 900 billion of anything really is.
Wow. That really puts the massive numbers into perspective. Just think of how many times you could wrap around the earth with 900 billion mattresses! The world would truly be a softer, more comfortable place. 🙂
TJ – the existing $7500 credit is for homes purchased after April 8, 2008. Sounds like you purchased in February, but did not move in until April. The language of the bill clearly states purchased after April 8. There is nothing in the existing $7500 credit law about move in dates (other than for new construction homes)
But, I'm not a tax professional. I recommend you find one and ask them.
Jay hilarious post. 900 billion is so hard to even imagine. I can't even fathom how they can spending all of that money. I'm sure they will find a way though, they always do.
Great post, it really puts the grossly high amount of money into a much better perspective. Too bad you don't see many news pieces like this, I think the general population would be a lot more educated about what our politicians are cookin' up.
Jay, no one will accept my proposal to give each American Home Owner a check for $250,000 to spend anyway they want. I know it would stimulate the economy and trickle it's way back up to those Wall Street and all those political connected people.
I would pay off my mortgage, buy a new car, invest a little in the stock market, put a little aside to pay for my son's education, get some home repairs, etc. Every household would be doing the same thing and the economy would be booming.
But, there are many things that the country could do with that kind of money that the small investor can't do. Mass Transit Mono Rail System to connect the cities, Energy production from the wind and sun to replace our old nuclear and coal generators, Recycle of metals and products that are being sent to "third world" countries for production efforts here in the USA, R&D on several different things that will set us apart from other countries are just a few examples.
Just think of the jobs that have been created since Eisenhower pushed the InterState Highway System, Wilson and the National Parks, Coolidge with the Hoover Dam, Roosevelt at the time of Tennessee Valley Authority. They are real jobs and a true benefit to all Americans. The private sector built stadiums, dinners, hotels, gas stations, and big balls of yarn so Americans could enjoy. Our food travels down those roads to our homes at affordable prices.
It only sounds like a lot of money to those who can remember the price of a coke being ten cents. It was a lot of money for the Louisiana Purchase and Stewarts Folly but that's what government does.
Besides, this is the spending result of eight years of GWBush and 6 years of the R Congress. But, then again, I am a liberal.
We have finally crossed the rubicon this time, no turning back. Wasn't this whole mess created on inflationary wealth we did not have? The herd mentality in Washington is taking us right over the cliff.
**Doug Willis´s last blog post..Pasadena Real Estate Blog Interviews Dr. Ryan C. Amacher, Professor of Economics</abbr></abbr>
I liked your blog about the stimulus bill. I would like you to check my blog out on the stimulus bill as well. It's at http://www.reviewthefacts.net
**John´s last blog post..2009 Stimulus Debate: Will It Help or Hurt?</abbr></abbr>
They need to pass this before last year's 110% increase in the U.S. money supply (via Federal counterfeiting a.k.a. deficit spending) "trickles down" from its wealthy corporate recipients and slashes the buying power of our wages. Last chance for free and easy astronomical scale looting of the U.S. economy.
Want to stimulate the economy? Cut our incredibly bloated and worthless "Defense" budget by 50% and redirect the capital to infrastructure, education, and sustainable energy programs. Oops, too late… we threw out criminal NeoCon rulers by installing criminal NeoLiberal rulers, notice the big "Change"… in rhetoric and symbolic gestures.
Unfortunately this is all hingsight in my opinion. Is the stimulus needed? Yes. Is it right? Probably not. Let's get to the bottom line on what caused this mess. It was rediculous risk the banks took. Wasn't it 2004 when the Bush administration called for regulations and an overhaul to fannie/freddie criteria? I am liberal as well, but some find it so convenient to blast Bush. Yes, he spent a lot but he also noticed things that went ignored.
Scott, I agree with you. The risk banks took to make a quick buck is what got us here – free enterprise, aka capitalism unchecked. The banks used their Lobbyist to push thru changes that include personal bankruptcy. They saw it coming.
As for Bush. Well, if he had attempted to work with the other side – he did call himself a "uniter, not a divider" he may have gotten the changes made to Fannie and Freddie. But, then again, if the Banks had not REDLINED to begin with they would have been able to keep some of the restrictions on lending in place.
It is my opinion, that 9/11 was the turning point. Our economy was at a stand still. The Bush administration said go shop and spend. The people in NY moved out to "safe haven" areas. The people in the new NYC suburbs were able to sell and buy in Flordia and Arizona. Other cities had the same type of push and the real estate market went up and up. Irrational Exuberance with no one at the helm smart enough to see it coming?
We shouldn't need to "fix" our infrastructure. It should have been maintained all along with the taxes collected from gasoline and other sources. We should not need to fund R&D on changes to our energy sources. That is what free enterprise like EXXON should have already done. Our auto industry should have been told a long time ago to work on a mass transit system, instead of making commando SUV that never leave the highway. We should not need to fix an repair schools, water and sewer, bridges and roadways. But, we do.
Maybe the Democrats will act with prudence and the Republicans will get over themselves and try to work together. Na, they will just hire a black guy to run the GOP and continue to push for tax cuts to the wealthy. As if this mess was all about taxes and race.
Government is largely to blame for this financial crisis. Both parties conspired to to have Fannie Mae and Freddie Mac underwrite too many bad loans and Wall Street followed their lead. You'd think our public servants, as they like to call themselves, would have a little more humility and acknowledge the economy works a lot better when they're not tinkering with it. Instead, they're taking the opposite approach and using the financial crisis as an opportunity to vastly increase the size and role of government. I hope our economy doesn't end like Europe's, but that seems to be the path we're on.
Hi Jay, I did some more quick math and calculated that if we glued 90,000,000,000,000 pennies together they would reach all the Pluto and back 412 times.
Of course there is neither enough copper nor glue on the earth to make this penny rope– so we're all stuck here on this planet for now.
-Bob
**Bob Maiocco´s last blog post..Denver is THE Best Place to Live & 43% of People Admit It</abbr></abbr>
Where did the original $700 Billion get us? They definitely need to have a better game plan before releasing another $900 Billion. That amount of money is unfathomable. Lets hope it gets us going in the right direction.
Brewer, the first $350 Billion went to all the executives for bonuses and to one finance or insurance company to buy out another. The second $350 hasn't been released to anyone yet. The other $150 Billion in pork the Republicans required to sign off on the "bail out"? I don't know. Maybe they started building that bridge in Alaska.
"House of Cards," the definitive look at the origins of the economic crisis, premieres on Thurs., Feb 12 at 8pm ET on CNBC. See the inside accounts from key players, tracing the calamity from Main Street to Wall Street to Washington. CNBC even reveals how one savvy investor even profited – by 600% – as the house of cards fell. Watch preview and see web extras at http://houseofcards.cnbc.com.
This is the definitive record of today's unprecedented economic crisis.
I am curious to see House of Cards. It seems the government will just be printing money and how can it not be worthless.
I cannot fathom the debt we will be incurring, however, I know our children will not be better for the money that is spent in the near future by our government.
**Colleen´s last blog post..West Richland Homes For Sale</abbr></abbr>
Can they at least have jail sentences for all the bank CEOs who contributed to this mess?
**James Boyer´s last blog post..Morristown NJ Home Sales / January 2009</abbr></abbr>
The good news is (this is going to blow people away I'm sure) that it will cost a lot more then the $900 billion if the US economy blows up into a depression. The reason is a falling tax base. As people spend less government takes in a lot less in tax revenue. (think sales taxs, etc) All this means it actually costs more to not do it assuming you think there's a fair chance the economy goes to depression without some demand side economics which is exactly what they are currently doing. This is why a ton of states are bankrupt right now (or on the verge) everything was great during the great economy and even a "decent" one but once things started into recession territory the tax base dried up and the sprial down only gets going faster and faster until everything locks up.
One more thing to realize is actually during the depression they did the same exact thing but it wasnt enough money and the stimulus wasn't quickly enough infused into the economy and this is when the real "depression" took hold and economic contraction took place for I think it was 42 solid months. Right now I think were going on 15 months of economic contraction and the next two worse recessions EVER both lasted each a grand total of 16 months. We will easily blow past that I think they should spend $2 trillion what difference does it make? Whatever's needed to reverse the course we are on is exactly what's needed.
I hope the government will try to stabilize real estate market, because what is happening now is simply said a mess. I hope for a new ideas, but this crisis will last for at least a few years. Let's wait and see how the things will be going.
**Mickey Kick´s last blog post..WHAT SHOULD I GO VISIT IN DUBROVNIK, CROATIA THIS SUMMER?</abbr></abbr>
@Michael Oliver ,
Good points. In fact, because of this we are paying off all debt, including our personal mortgage and investment properties. This is a first for us as we have always leveraged our mortgages against investments producing a greater return. I think we are headed to incredibly bad times. Perhaps a slight lift economic lift (like a caffeine or sugar shot) in the next half year or so because of the stimulus package, but when we come down, we will come down hard. IMHO!
**Colleen´s last blog post..West Richland Homes For Sale</abbr></abbr>
That had me laughing at the end! Wonderful history lesson there and a GREAT comparison of the 900 BILLION dollors to seconds; very sobering thoughts there. I wonder how many years it will take for our children's grandchildren's grandchildren's children to work off this debt we are digging here?
**MaryAnn Knell-Peoria Real Estate´s last blog post..10 Steps to Achieving the American Dream of Home Ownership!</abbr></abbr>
That is really rather disconserting. MaryAnn Knell has a good point-I wonder what all this debt will do for our econony; it is a possibility all this bail out spending is only making the problem worse, just further down the road.
TAX!!!!! many business are being affected with this issue, The RE agent drop in income story has other facets.Agents incomes are way down. The figures calculated are probably directionally correct overall. What makes things worse for the agents is that they're not doing 54% less work, or incurring 54% less out of pocket costs. Many pay for system access and certain RE related services out of pocket. With income reduced but expenses holding steady, the reduction in their net income is more pronounced. Many of these agents are also spending significant amounts of time and energy working on short sales. Few of these transactions end up closing and yielding commission $ as many banks are dragging their feet on dealing with problems. The only people who seem to have it worse are the spec builders. Many are being boiled alive as the problems they put off in 2008 by renting out unsold inventory are now snowballing into massive losses.
TAX!!!!! many business are being affected with this issue, The RE agent drop in income story has other facets.Agents incomes are way down. The figures calculated are probably directionally correct overall. What makes things worse for the agents is that they're not doing 54% less work, or incurring 54% less out of pocket costs. Many pay for system access and certain RE related services out of pocket. With income reduced but expenses holding steady, the reduction in their net income is more pronounced. Many of these agents are also spending significant amounts of time and energy working on short sales. Few of these transactions end up closing and yielding commission $ as many banks are dragging their feet on dealing with problems. The only people who seem to have it worse are the spec builders. Many are being boiled alive as the problems they put off in 2008 by renting out unsold inventory are now snowballing into massive losses.