Can The Bailout Be Put Aside And A New Version Worked Out And Enacted?

[stopbush]

The talk this week from Krugman and others is that the bailout has failed to have the desired effect of building confidence in the economy. If that's the case, why move forward with the plan as signed by bush? Why pay out $700-bn if the plan is not having the desired effect of IMMEDIATELY restoring confidence? Why pay out a dime when paying out anything at this point is throwing good money after bad policy?

Seems to me Congress should have another go at the thing. Perhaps a surrogate organization could be enlisted to challenge the current bailout in the courts. That would buy time for Congress to get to work on something else. The fear of the markets crashing is sort of moot at this point as they are crashing.

Everyone seems to agree the bailout hasn't worked, so why go forward with the huge payout?

Comments?

[nadinbrzezinski]

1. THe problem is that we need to do far more than just the bailout

I have said this before, the depression ran 1T... adjusted for inflation that's about 12 T

The bill has some GOOD elements in it, like the expansion of HOPE

Though far from enough

At this point they need to figure how to do TWO things at the same time... get the liquidity going (why the Feds are considering direct involvement in commercial paper... and lord help us if this is NOT short term)... and get back consumer confidence (bottom up)

It took MUCH legislation to do exactly this back between 1932 and 1938... and as I said much money

Me.. I'd enact a WPA like NOW... and also a couple bank holidays to go through books, and companies that don't want to play, like they didn't in 1929, ok fine, no fed help at all, or fed contracts... I'm easy

The effect of this in the very short term was expected to be psychological... as it would take anywhere from three to five weeks for moneys to actually be spent... on the bright side, we are seeing OTHER central banks play the recapitalization game... so that MIGHT buy us the time these things will buy us for the rest of the bills that will be required.

We didn't get here in two weeks, but rather in three to four years... and we will not get out of this in two weeks either

[whistle]

2. Congress could freeze it