New Internationalist

How to find $700 billion without really trying

A mere $700 billion is what was needed to save the world from immediate ruin.

According to Hank Paulson, the former boss of the Goldman Sachs investment bank who is now US Treasury Secretary, this money has to come from tax payers and go to his chums on Wall Street. Otherwise they will throw the rattle out of the pram.

I have a better idea. In 2001 and 2003 the George W Bush regime cut taxes for the rich in the US - those who, like Paulson himself, have an income of $1 million or more every year - by what would amount to $1.3 trillion over the following 10 years.

About five years have passed since then, so the rich have had roughly half that amount already - by a strange coincidence, close to that $700 billion.

So, if Paulson and his chums really do want to save the world, why don’t they just pay it back?

Comments on How to find $700 billion without really trying

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  1. #1 Michael 26 Sep 08

    Well done Mr Ransom!

    I think the editors at the NI should grab this opportunity and really expose what all this means. That the market doesn't work and how it needs to be propped up with tax payers money. And how these taxes are coming from the poor to help the rich. There is talk of nationalization of banks and even of socialism. But I can't see any redistribution of wealth - it's a sticking plaster to keep the economy going, to keep faith in the market and to avoid the really big question. As Mr Bush addressed the nation last night, with those silly laughing eyes of his, he basically said 'America is on the brink of a disaster. The market is not really working'.

    I'll look out for your updates. I want to know more

  2. #2 Owen85 27 Sep 08

    I hate to be pedantic, but it's Hank Paulson, not Jack...
    Absolutely spot on regarding the ridiculousness of the Bush administration's attitude towards taxation however. They will portray themselves as a 'tax-cutting' regime whilst it suits the high-earners, but as soon as their buddies on Wall Street are hit by their own excesses it becomes an issue of 'national interest', and one which the average taxpayer inevitably ends up paying for.

  3. #6 Sam Philip 05 Oct 08

    This disaster as mentioned by George Bush is a man made disaster. Right from the collapse of Enron, the Government has failed to make some radical changes in the way we do business. Powerful corporations, greedy CEOs and blood sucking speculators aggressivenes has brought us to this far. Now the issue has become an international issue, and the amount as said by South African finance minister, is 2 times the GDP of that country and half of it is enough to save world's poor from hunger, malnutrition and diseses.
    Rememeber the days before the Great depression when Company's profit rose by 70% and wages just 8%. When Company's profits are concentrated in a few hands how do we expect to create income for spending?

  4. #7 Lisa P 18 Nov 08

    Yeah, perhaps, maybe yes. But, why do people don’Many people think that U.S. Secretary Henry Paulson planned to use the second half of the recent $700 billion financial rescue program to buy up all of those devalued mortgages that are fluttering in the wind. That mortgage juice is going to be spent on consumer credit instead. Any industry that has any form of consumer credit, will receive aid, which should include a payday cash loan, but most likely won't. Paulson says he wants every American to have easier access to any traditional form of credit, such as car loans, student loans, and credit cards. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy,” he says. Of course it is, but was it necessary to spend all this time concocting your previous version of your rescue plan that would actually uphold that “heavy burden?” At least he admits to his mistake. If America had a President who was willing to do the same, perhaps America could make the best of the broken pieces and move on, or maybe certain problems would’ve been prevented in the first place. However, government officials seem to have the right mindset: they’re planning to use some of the bailout money to encourage private investors to come back to the market. We would have a more stable job market and fewer people will depend upon payday cash when the tide is low. Of course, the industry will always be there to provide financial assistance in case of unforeseen events, but it is not designed for long-term reliance.

  5. #8 davidr 18 Nov 08

    Well, yes, but the basic problem remains the same. Just as the whole fiasco started with the seemingly marginal 'sub-prime' people in the US, so any 'stimulus' that ends up adding to the fortunes of the wealthy doesn't actually work. The problem of inequality is not just a moral one, but an economic one as well, sometimes referred to as 'over-production'. Not just in the US, but worldwide, most people simply don't have the means (or the credit) to buy all the stuff capitalism needs to produce to make itself profitable. The tax system makes things worse, because it's become 'regressive' - less and less 'direct' and aimed at personal or corporate wealth, more and more 'indirect' and aimed at the things everyone has to buy. Clearly, the likes of Paulson can't think of giving the money back out of a sense of moral (or even economic) duty. So it's a political issue. Maybe, just maybe, President Obama will do it for them. We shall see.

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About the author

David Ransom a New Internationalist contributor

David Ransom joined New Internationalist in 1989 and wrote on a range of issues, from green justice to the current financial crisis, before retiring in 2009. He was a close friend of Blair Peach, once worked as a banker in Uruguay and continued to contribute to New Internationalist as a freelancer until shortly before his death in February 2016. He lived on a barge on the waterways of England’s West Country.

His publications include License to Kill on the death of Blair Peach in 1979 and The No Nonsense Guide to Fair Trade. He also co-edited, with Vanessa Baird, People First Economics.

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