Don't read this from today's Washington Post if you have a weak stomach or blood pressure problems. In a remarkable story, Neel Kashkari, the many who conceived of and ran TARP for Bush Treasury Secretary Hank Paulson, admits that the $700 billion figure came "out of the air." Here's the money quote:
"Seven hundred billion was a number out of the air," Kashkari recalls.... "It was a political calculus. I said, 'We don't know how much is enough. We need as much as we can get [from Congress]. What about a trillion?' 'No way,' Hank shook his head. I said, 'Okay, what about 700 billion?'"
whoever thinks that goverment
whoever thinks that goverment actions are based on true and trusted numbers is a troll ;-)
Source of Quote
That quote sounds like it came from Sorkin's "Too Big to Fail." That whole exchange was extensively quoted in the book.
I read this article on Friday
I read this article on Friday and in fact the process for coming up with $700 billion is described in much more detail in Andrew Ross Sorkin's book "Too Big to Fail." It really is amazing how they conceived that figure. It's valuable insight into what was going on in Treasury at that time, and how much regulators didn't know about bank balance sheets. A trillion is too large, and they still wanted to scare Congress to get the money, so they settled on a "nice round number."
Does This Shock Anybody?
It was the Bush administration's M.O. Troops for Iraq? Pulled out of the air. Troops for the surge? Same. Plan / costs for setting up a real gov't in Iraq? Same. Troops needed to succeed in Afghanistan? Yep.
As somebody in the administration was quoted as saying, "we make our own reality."