That number has started obscuring more than it illuminates. Andrew Sullivan, for instance, posts this graph, courtesy of the LA Times:
Whoa. Death by bailout. But the $700 billion is the total amount of assets the Secretary of Treasury can purchase. It is not the total cost of the bill. Then all the assets need to be sold. No one quite knows the price at which they'll be sold. If that price is not as much or more than they cost, then the bill forces the president to submit legislation "that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt." Then there are the potential gains on the equity taxpayers get in rescued institutions.As the CBO says, "enacting the bill would likely entail some net budget cost—which would, however, be substantially smaller than $700 billion." Hell, the LA Times article featuring that misleading graphic quotes one Brad DeLong saying, "It's entirely within the realm of possibility that we'll make money on this deal." Now, you could imagine structuring the bill such that full repayment is more likely and such that profit is more likely. But even in its current form, no analyst I've read thinks the legislation will cost $700 billion, or even close to it.
Whoa. Death by bailout. But the $700 billion is the total amount of assets the Secretary of Treasury can purchase. It is not the total cost of the bill. Then all the assets need to be sold. No one quite knows the price at which they'll be sold. If that price is not as much or more than they cost, then the bill forces the president to submit legislation "that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national debt." Then there are the potential gains on the equity taxpayers get in rescued institutions.As the CBO says, "enacting the bill would likely entail some net budget cost—which would, however, be substantially smaller than $700 billion." Hell, the LA Times article featuring that misleading graphic quotes one Brad DeLong saying, "It's entirely within the realm of possibility that we'll make money on this deal." Now, you could imagine structuring the bill such that full repayment is more likely and such that profit is more likely. But even in its current form, no analyst I've read thinks the legislation will cost $700 billion, or even close to it. 
