You know, a commenter at HuffPo made a tongue-in-cheek suggestion, but it actually has some merit. He suggested that rather than giving the banks 700 billion dollars, the government (or more accurately, the taxpayers) give each taxpayer in the U.S. one million dollars each. Additional commenters suggested details like: (1) each taxpayer would be required to use the money to pay off their mortgages and credit debt, and (2) would only be allowed to save or invest $50,000 of the million. The rest would have to be spent on tangible goods to boost the retail sector. That would in turn give Congress enough time to come up a value to place on all the worthless debt that the banks want us to assume, formulate a reasonable bail-out, and would have the added benefit of reducing the necessary bail-out
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It is a promising sign that Congress is at least putting up token resistance to the deal. If any money is used to prop up the investment banks, and something ought to be done to keep as many from collapsing as possible, it should be in the form of a loan with oodles of strings attached. I'm glad that people are also considering more seriously the exorbitant salaries top management are paid- they'd better, if we're being asked to foot the bill! My favorite response has been a letter to the editor in the San Diego Union Tribune:
As a somewhat frugal American who is driving two old paid-off cars, I would like to request some collateral for the loan I am about to make to our downtrodden Wall Street types. Please deliver one Rolls-Royce, preferably silver with low miles, to my address. You should have no trouble finding my home. I only have one.
Without wishing to put too much of a downer on it - and without defending the bailout, which I think needs a heck of a lot more thought - the credit markets are the inter-bank markets, not the loan-to-customer markets. The following is based on the UK bank market, as that's what I work with, but what I've seen from US colleagues indicates that things aren't very different elsewhere
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As a somewhat frugal American who is driving two old paid-off cars, I would like to request some collateral for the loan I am about to make to our downtrodden Wall Street types. Please deliver one Rolls-Royce, preferably silver with low miles, to my address. You should have no trouble finding my home. I only have one.
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