Another $700 Billion Mistake?
As you may have heard, the government is going to spend around $700 billion dollars (the exact amount is still unclear; it could be more) to buy bad debt from Wall Street banks. That's comparable to the total amount spent in Iraq since we invaded-the only other item from our budget that is anywhere near as ridiculous. Links to aid in your (and our) understanding below.The bottom line: spectators from across the political spectrum think we're rushing into this bailout without thinking it through.-Here's the actual text of the legislative proposal. At 851 words, it's incredibly concise. That's $822 million per word. Not a good sign.-William Kristol says: "There are no provisions for - or even promises of - disclosure, accountability or transparency. Surely Congress can at least ask some hard questions about such an open-ended commitment." He's calling for McCain and Obama to oppose it because he's not sure the plan gets even the basics right.-Paul Krugman says: "I'd urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem."-Greg Mankiw seems concerned about the "blank check" nature of the bailout.-The site Buy My Shitpile, Henry invites you to join in the fun, posting the "bad assets" you'd like to unload: "The fact that you think they are worth more than anyone will buy them for is what makes them bad assets."-The best run-down of reasons to oppose this particular bailout proposal comes from Naked Capitalism: "The increase of the request from the initial $500 billion and the release of the shockingly short, sweeping text of the proposed legislation has lead to reactions of consternation among the knowledgeable, but whether this translates into enough popular ire fast enough to restrain this freight train remains to be seen."Screen grab of bad assets from buymyshitpile.com