Hacker News Reader

Comment by ckinnan | Hacker News Reader

The cost is less than the U.S. government's bailout of Bear Stearns...for the cost of our bailout of AIG, America could have built 8 of these stations.

View on HN

If I were debating buying a laptop with a NASA advocate:

Me: Hmm, I wonder if I should spend $1,200 on a cheapish Dell or $3,000 on a Mac.

NASA: You should spend $300,000 on a NASA laptop.

Me: What kind of laptop costs $300,000?!

NASA: The kind built with space-age technology by defense contractors in redundant factories conveniently placed in every congressional district in America.

Me: But... $300,000!?

NASA: Its cheap for the price. You get a revolutionary new cooling system, suitable for working outside the atmosphere.

Me: But... I don't need to use it outside the atmosphere.

NASA: No, it has to be used in space.

Me: But all I need is a laptop.

NASA: No, a laptop -- to be used in space. Besides, once we're done with it, you can keep the cooling system.

Me: But if I needed the cooling system, I would have paid you to do R&D on a cooling system. I don't need R&D on a cooling system. If I did, I could get it a lot cheaper. What I need is a laptop.

NASA: A laptop... which can be used in space.

Me: Space is not a requirement! Space is something you add to the project because you wouldn't exist without space! Space doesn't add value! Space merely costs! Costs lots of money!

NASA: That's hurtful. Besides, the NASA laptop is cheaper than Social Security.

Me: I don't care what it is cheaper than! The frame of reference is not "other wasteful government programs"! It is "a laptop"!

NASA: A laptop, in space.

To be fare, NASA is about space so if they are selling a laptop it is of course one which is designed to work in space. So, I am either confused or your irony has not come across.

For the record, NASA uses Thinkpads.

http://upload.wikimedia.org/wikipedia/commons/0/05/TORU_dock...

and quite a bit of them at that!

The cost of bailing out several of the big "banks" was approximately nothing because they paid back their loans with interest.

PS: AIG has already payed back 9 billion of it's 80 billion loan, and expects to make another 25 billion payment fairly soon. Granted it's selling off assets to do this, but it's profit of $1.8 billion in the second quarter gives you some idea how many assets the company has. http://money.cnn.com/2009/08/20/news/companies/aig/index.htm...

> The cost of bailing out several of the big "banks" was approximately nothing because they paid back their loans with interest.

The "cost" was the risk assumed by the taxpayers.

No, the "cost" is the risk currently assumed by the taxpayers plus opertunity cost and any defaulted loans. As they pay back the loans the risk keeps dropping. The upper bound on risk might be the total amount loaned, but you can't talk about the bailout as the total loan amount once they start to pay back most of the money.

PS: The actual cost estimate of the bailut was probably upto 10% of the amount of money loaned. It's quite possible we will make money from this at which point talking about the cost based on the total loan amount would be silly.

> opertunity cost

The opportunity cost was enormous. The bailouts were a disaster for American capitalism. We now have a huge tattoo that reads "WARNING: Crony Capitalist Country. Proceed with caution".

Don't ignore the very difficult to quantify effects of the bailouts on the credit markets. The whole lesson will surely make the US a less credit worthy market and raise more questions about the dollar.

If the government is willing to bail out companies that fail then it reduces risks, so you should be more willing to invest in those companies.

You're assuming that the govt will bail out investors. GM proves that it won't. It can't even be relied on to guarantee that lenders keep their place in line.

Yes, exactly. That is the problem. Capital destroying companies are attracting capital due to government interference, when really they should be liquidated and bought up by competent managers.

We've also increased the value of "owning" congresscritters. Before, they were good for arranging contracts and screwing competitors. Now they're also a line of credit.

The real cost is the near certainty we'll get an even bigger blow up five to ten years down the road. Thousands of people who should now be looking for a new career are still in finance. Moral hazard's a bitch. The system NEEDED many jaw dropping bankruptcies and liquidations.

They got a pretty good deal in general too. Speaking from the perspective of a shareholder of M&I bank. They recently diluted their stock by a large percentage to pay back the loans in addition to giving preferred shareholders a dividend (those are the shares the government holds)

Reply on news.ycombinator.com