jacosa

How to Spend $700B and Actually Solve the Problem

I'd like to float "A Modest Proposal." For $700,000,000,000 (it DOES look pretty big with all those zeroes actually written) the government could go a long way toward paying off those shaky mortgages underlying this mess. That would take the pressure off the banks. Think about it.

The social consequences would be horrendous, and it's pretty obvious that there would be an artificial boom that would make 1999 look tiny. So maybe a few less hundreds of billions might be a better number: saving money on a bailout isn't bad.

Government Bailout: We Are All Keynesians Now

I'm sure a Keynesian, and my SEVERE problem with what I've heard about the proposal on the table is that it seems to neglect velocity of money issues. Buying bad assets will eventually free up credit, but it doesn't look rapid. Something closer to the consumer might rescue Christmas retailing and turn over more times in the immediate future.