Globalist quiz: Sizing up the bailout

In response to the U.S. financial meltdown, Congress passed and President Bush signed into law a $700 billion bailout bill in early October. With the economy showing few signs of improving, various industries are trying to get a piece of the pie. What is the bailout package equivalent to in dollar terms?

A. U.S. defense budget

B. U.S. trade deficit

C. U.S. oil imports

D. A stack of $1 bills 52,000 miles high

What is the bailout package equivalent to in dollar terms?

A. U.S. defense budget is correct.

U.S. military spending has increased 72 percent in eight years, to $671 billion for fiscal year 2008. The United States could spend in excess of $700 billion on defense in 2009, more than double the amount spent in 2001.

That represents more than half of all global spending on the military — and 17 times U.S. spending on diplomacy and foreign aid.

B. U.S. trade deficit is correct.

From January through October, the United States' trade deficit reached approximately $700 billion. Looking ahead, there are signs that the U.S. trade deficit may be narrowing, as the declining economy has caused imports to slow.

For example, in September, imports posted a record 5.6 percent drop to $212 billion, while exports declined 6.1 percent to $155 billion, the largest decrease since September 2001.

C. U.S. oil imports is not correct.

Although the U.S. accounts for only 4.5 percent of the world population, it consumes 21 million of the 85 million barrels of oil produced every day — or about a fourth of the world total. The U.S. is expected to spend $500 billion on oil imports in 2008 (depending on the price of oil), nearly twice as much as in 2005. Of this, nearly 40 percent will come from Canada, Mexico, Brazil, Colombia and the United Kingdom. Given that the United States has less than 3 percent of the world's oil reserves, the increasing demand for oil could only be satisfied by rising imports. While imports were 24 percent of total demand in 1970, they now are close to 70 percent.

D. A stack of $1 bills 52,000 miles high is correct.

A stack of 700 billion $1 bills would be about 52,000 miles high — roughly one-quarter of the way to the moon. In addition, 700 billion $1 bills placed end to end lengthwise would stretch 65 million miles, or two-thirds of the way to the sun. Finally, the bailout package of $700 billion is slightly less than the $829 billion value of all U.S. banknotes and coins now in circulation worldwide.