Berk's Blog

Can (These) People Allocate $787 Billion Effectively?

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I know it doesn’t seem like it touches us, but check out how big the “stimulus/spending bill that Congress just passed and the President signed into law is.

How and why do we give these very very ordinary people the power over allocating so much of our resources? Ever really think about how the decision to spend all this money should be made?

I have a feeling the best answer is not the government. Forget about the ideological arguments for a moment – there seems to be no way that humans or simple organizations of humans can spend this money effectively and optimally. How do we know that we will get a high social return on this money? We don’t – we hope, but it seems to be a high probability that we will not get our money’s worth.

This from today’s CARPE DIEM from Dr. Mark Perry:

How Big is $787 Billion? What Would It Buy?

The latest estimates for the stimulus package are about $787 billion, a number so mind-numbing large it’s hard to even imagine a number of that size.

Yesterday’s “The Gartman Letter” puts it in perspective for us:

$787 billion would buy 4.6 million homes here in the US at the most recent median price of $170,300 for January 2008.

$787 billion would send a check for $2,623 to every man, woman and child in the US.

$787 billion would fund 7.7 million four year scholarships to the average private university in the US at current tuition rates.

$787 billion would fund 30 million full four year scholarships to the nation’s public universities.

$787 billion would buy 27.7 million cars at the average price of an automobile sold last year in the US.

$787 billion would fund four full months of a tax holiday in the US.