$350 Billion, Not $2.5 Trillion

$350 billion dollars is a lot of money. And that’s how much the Treasury committed yesterday. Not $2.5 trillion. A headline like “Bailout Plan: $2.5 Trillion and a Strong U.S. Hand” is pretty misleading. The article text is (as is often the case) better:

Administration officials committed to flood the financial system with as much as $2.5 trillion — $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.

We shouldn’t sneer at $350 billion. Eighteen months ago there were lots of social welfare that Barack Obama (or Hillary Clinton or John Edwards or Bill Richardson) could have embraced to endear himself to Democratic Party primary voters except advisers would come back and say “Senator, that’ll cost $350 over ten years—we can’t do it.” But it’s a much smaller number than $2.5 trillion.