The big question: Does money determine who will win the race for the White House?

Why are we asking the question now?

Democratic and Republican candidates alike for the White House have just made public their first quarter 2007 fundraising totals as required by federal law. Partly because it is so open, next year's presidential election is already certain to be the most expensive ever, at well over $1bn (£501m). By the time it is over each major party nominee will probably have spent $500m. Strategists say the "entry fee" - the minimum amount needed to mount a credible primary campaign - will be $100m at least. Thus fundraising prowess amounts to a "silent primary" whose results can determine the credibility of a candidacy.

But why are such vast sums of money required?

First, are they really that vast? Americans will spend as much on Halloween costumes this year as the two main candidates will spend on trying to become the 44th president. Which is the higher priority depends on your point of view. More seriously, election costs are soaring because the structure of the campaign is changing.

True, the kick-off caucuses and primaries in Iowa, New Hampshire, South Carolina (now joined by Nevada) will be as important as ever. But they will be followed by a de facto national primary as early as 5 February, when the "mega-states" of California, Illinois, Michigan and Florida, among others, will vote.

This front-loading is compressing the entire primary season into a bare six weeks. Moreover door-to-door retail politics simply doesn't work in such large and populous states. A candidate must rely on television advertising, in some of the country's most expensive media markets. In short, a large and pre-assembled war-chest is essential.

Who's doing best?

As a group, the Democrats are far out-raising Republicans - which is an interesting pointer to the national mood. Among the former, Hillary Clinton, with almost $30m, has the most money on hand overall. But in the first quarter she raised "only" $19.1m of fresh money, trailing Barack Obama, who raised a stupendous $25.8m. These figures have banished all doubt that the Illinois senator is a major threat to Ms Clinton.

Third is John Edwards, the former North Carolina senator, who collected $14m in the quarter (a record in any other year). On the Republican side, the former Massachusetts governor Mitt Romney won the fundraising race with $21m, ahead of the former New York mayor Rudy Giuliani ($14.7m), and John McCain, the Arizona senator ($13m). Making matters worse for Mr McCain, he is burning funds as if there is no tomorrow. He spent $8.3m in the first quarter, leaving him with a modest $5m of cash in hand.

Can all this money be spent on the primaries?

No. Individual donors are allowed to give up to $4,600 to a candidate, $2,300 for the primaries and $2,300 for the general election, should their man (or woman) win the nomination, to be formally conferred at the party

conventions next summer. If you give Obama, say, $2,000 for the general elections, and he isn't the nominee, then you get your money back - that is, if he didn't blow it on the primaries.

On this basis, Obama's performance is even more impressive. He has thus far raised $24.8m for the primaries, and just $1m for the general. Ms Clinton has collected $19.1 for the primaries, and $6.9m for the general election, suggesting he has a wider pool of donors available, should he be the nominee.

Does money determine victory?

The answer may be summed up in the old adage: there's only one thing worse than having money, and that's not having it. A massive fundraising performance can create a sense of inevitability, as it did for George Bush in 2000 - and in 2004 for John Kerry in the Democratic field (once the Howard Dean bubble burst). But there is nothing inevitable about Hillary Clinton's nomination.

"Money is the mother's milk of politics," said Jesse Unruh, the colourful former speaker of the California state assembly. In 1995 that phrase was joined in the political lexicon by the remark of Phil Gramm, a one-time Texas senator and presidential hopeful, that "Money is a politician's best friend."

Mr Gramm raised tons of it in his bid for the 1996 Republican nomination, but his campaign made so little impact that he pulled out before the New Hampshire primary.

Wouldn't public funding be fairer?

There is a system of public financing, brought in as part of the post-Watergate campaign finance reform, intended to prevent a repeat of the abuses of the 1972 Nixon re-election campaign. Once a primary candidate has collected $100,000 in small donations (thus proving he has a genuine following) he can apply for federal money to match up to the first $250 of each donation.

In 2008, this would translate into roughly $25m for the primary season, and grants of $15m for the convention and $83m for the general election, should a candidate who has opted for public financing win the nomination. But this time, every major hopeful has opted out (even John McCain, one of the strongest Congressional advocates of campaign finance reform). If $100m is the "entry fee", $25m doesn't go very far. You're better off on your own.

Why then don't they increase the limits?

For two reasons. The first is that the public campaign funds are raised by Americans ticking off a voluntary $3 donation box on their federal tax returns, a mechanism which generates $400m per presidential election cycle. In a year when both parties have strong multi- candidate fields, this is simply not enough.

There is a constitutional objection too, that any artificial limit on a candidate spending as much as he wants infringes the freedom of speech provision in the first amendment of the US Constitution. The likelihood, in short, is that the era of public financing for elections is over.

So it helps to be a billionaire?

Most definitely. The Texan businessman Ross Perot, with a fortune of $2bn, started the trend in 1992 with his independent bid for the White House, on which he spent $60m out of his own pocket. Steve Forbes, publisher of the business magazine, tried and failed to win the 1996 Republican nomination.

And it could happen again. Rumours abound that Michael Bloomberg, who succeeded Mr Giuliani as Mayor of New York, is mulling over whether to enter the race, probably as an independent.

Will US presidential politics be forever ruled by cash?

Yes...

* In a huge country, a national campaign is bound to be hugely expensive

* This is the system that Americans are used to, even if it can degenerate into organised corruption

* The principle that people should be allowed to spend as much as they want is constitutionally protected

No...

* After several high-profile lobbying and corruption scandals, there will be a backlash against money dominating politics

* The system is too exhausting. Candidates have to spend as much time raising money as interacting with voters

* As the Forbes, Gramm, and Perot cases prove, money isn't everything