There is a term I wanted to use for Mr. Geithner’s Plan, though I know I cannot use the one which keeps coming to mind; Cursing foresworn on the basis of Good Conduct. The quoted $2.5 trillion potential Cost is not Stimulus, but a ‘Buy-out’ Bid. The Recipients are offering to sell a used Ford, while Geithner wants to offer the Price of a new Ferrari. Geithner may not know this, but the toxic assets were not worth that amount when they were first issued in a wildcat Boom. Banks are not lending because they are waiting for the federal Government’s free Cash; some 77% of their total assets would have to a total loss, a sum which must put the Banks leadership in the docket with Bernie Madoff for a traceable Ponzie scheme. Does no one understand such a level of asset disappearance is an indictable offense?
I didn’t even mention the ‘Crowding-Out’ effect of trying to attempt to draw that much Cash from an over-stressed economy in the previous paragraph. The amounts discussed are equal to more than a Year’s tax revenues for the federal government, and never could be repaid at all, even if We did not have another Recession over the next twenty years. Understand this is a huge amount for a very temporary Fix; and is effectively equivalent to tripling the total federal payroll for a series of years; with no one showing up for Work. There is no way such funds could possibly be withdrawn from the economy to pay a very specialized financial sector; it will cripple the overall economy just in the funding aspect. It also does not look forward, simply consisting of promising Banks that the federal government will repay them for losses already incurred.
My eyes begin to glaze, and my Mind delves into pathological Thoughts, as I listen to members of Congress complain only of a lack of detail. I truly would enjoy ramming that detail up their rears with a Jackhammer. The Geithner Plan makes as much sense as my own fairy tale Stimulus plan: give Everyone a Tax Holiday for two years, then impose a tax rate of 70% without any deductions at all. Both Plans give much, promise nothing, and will mean nothing at the end of two years. My worst fear is that when firewood becomes scare, and people will start debasing Currency in their attempts to keep warm. lgl