For the lawyers and policy geeks out there, I present to you the following - here is the Paulson plan (TARP Capital Plan), which was not passed.
Here is what ultimately passed--the Emergency Economic Stabilization Act of 2008 (EESA). More to come from our government, I bet.
One question: if Sarbanes-Oxley didn't solve the problem of lying CEOs, what makes anyone think more regulation is going to fix our current problems?
I don't know how to fix our economy, but I am surprised more condo/townhouse complexes aren't renting rather than trying to sell vacant units. I am also surprised that government officials are not talking more about assisting apartment complex owners and renters. If rents fall low enough, people can walk away from their houses and rent at reasonable prices. Then, the housing crisis becomes a matter of banks lowering housing prices to a level where it makes sense for prospective homeowners to buy.
Perhaps I am missing something, but if I were Congress, I'd pass a $5,000 rental tax credit for families whose houses were underwater. I bet the banks would quickly start negotiating better terms for the current homeowners to convince them to stay or would keep the houses on their own books and start renting them to the current residents.