The most popular post ever on this blog was ‘How much is $700bn‘ – a set of ‘killer facts‘ on the initial US bailout. These days $700bn feels like small change, so it’s time for an update in the run up to Saturday’s Financing for Development meeting in Doha and Monday’s start to this year’s big climate change ‘conference of the parties’ in Poznan. ‘Skewed Priorities’, a new report by Sarah Anderson, John Cavanagh and Janet Redman at the Washington DC-based Institute for Policy Studies, compares the scale of global bailouts with spending on aid and climate change. Key finding? The United States and European governments have committed 40 times more money to rescue financial firms than to fight climate and poverty crises in the developing world.
Some other killer facts from the report:
The U.S. Treasury Department’s bailout of one single company, AIG, far exceeded the total sum of all U.S. and European development aid in 2007. As of November 14, the U.S. government had put up $152.5 billion to rescue the insurance firm, compared to the $90.7 billion spent last year by the United States and 17 Western European countries on development aid.
The U.S. government spent $23.2 billion in aid to all developing countries in 2007. That’s less than the $29 billion to bail out investment bank Bear Stearns.
And a couple from me:
$4.1 trillion is enough to eradicate all world poverty for over thirteen years (the UNDP calculates it would take $300bn to get the entire world population over the $1 a day poverty line).
Two caveats: firstly, the weekly procession of bailouts means that these numbers go out of date as soon as they come out. The IPS report covers up to 19 November, and so does not include US Treasury Secretary Henry Paulson’s Nov 25th announcement of a further $800 billion. Shame – $5 trillion is a nice round number. Second (and importantly), if things go well, governments (and taxpayers) should recoup most, if not all, of the money. But right now, that looks like a big if.