Putting it into perspective

The potential government bailout of the US banking industry is big news these days, and it's widely reported that this will probably require about $700 billion of government funding. That's a lot of money. Its so much money that it's somewhat trendy today to make comparisons that give this number some meaningful context.

$700 billion is roughly equal to the GDP of Taiwan. Or it's roughly 12 times Bill Gates' fortune. It's also almost five times the $150 billion cost of the bailout of the US savings and loan industry that happened in the 1990s.

On the other hand, $700 billion may not be that bad, at least compared to other costs. The Sarbanes-Oxley Act alone might have imposed even bigger costs on US businesses, for example. One study estimated the total costs of the Sarbanes-Oxley Act to be roughly $1.4 trillion. This estimate was reduced to only $1 trillion in a more careful follow-up study, but even the smaller figure is still a huge amount.

So although $700 billion is certainly a lot of money, it may not be that much more that the costs imposed by some government regulations.