Re: Roubini Predicts U.S. Losses May Reach $3.6 Trillion

[David Farber <dave () farber net>]

Begin forwarded message:

From: dewayne () warpspeed com (Dewayne Hendricks)
Date: January 22, 2009 7:00:50 AM EST
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] Re: Roubini Predicts U.S. Losses May Reach $3.6  
Trillion

[Note:  This comment comes from friend Andrew Odlyzko.  DLH]

From: odlyzko () dtc umn edu (Andrew M. Odlyzko)
Date: January 21, 2009 3:58:50 PM PST
To: dewayne () warpspeed com
Subject: Re: [Dewayne-Net] Roubini Predicts U.S. Losses May Reach $3.6  
Trillion

Dewayne,

Hopefully this projection is too pessimistic, but one never knows.
The Swedish real estate bubble of the early 1990s cost about 6% of
Swedish GDP, which is equivalent to about $1 trillion for the US.
(But this is, as far as I understand, the net cost to Swedish
taxpayers, at its maximum they had to shovel much more money into
the system, it's just that they recovered some of their losses.)
On the other hand, Japan ended up increasing their national debt
by about 100% of GDP during the 1990s and early 2000s, equivalent
to $15 trillion for the US today, trying to get out of their mess.
Supposedly our economic experts have learned from the experience
of Japan, but one never knows.  Our situation is more similar to
that of Japan, with the bubble inflating the prices of just about
everything, than to the Swedish one, where it was primarily real
estate that was bubbly.

So somewhere in the range of $1 - 15 trillion is what it might
cost.

Best regards,
Andrew
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