You Will Never Get This! (c) Borat
By now you've all heard that the $700 billion bailout plan was defeated at the House yesterday.
But what you probably don't know is that the bailout was similar to a football contract in that the guaranteed amount was entirely different than the alleged value of the entire contract.
For example, when Nate Clements from the San Fransisco 49ers signed an $80 million deal in 2007, it was repeated ad nauseum because $80 million sounds fantastic. But in reality, he's only going to make about $22 million because the most of the money in the contract was back-loaded on years that he's never going to get paid for.
Same thing with the "$700 billion bailout."
This is a key tidbit from an article by Kevin Hall talking about the basic details of the bailout:
Q.Is Congress writing a $700 billion check to Wall Street?
A. No. The money will be disbursed in installments. The Treasury will get $250 billion to immediately begin buying the bad assets. Another $100 billion can be obtained with a report to Congress on the need for it, and the remaining $350 billion will be released only upon congressional action.
So the $700 Billion bailout was really only $250 billion with options for the rest (still a big number, but not $700 billion).
Cue the Music: