The revised Paulson Plan has failed, at least for the moment. The markets have gone down. The fears of a credit freeze are growing. What to do now?
I suggest this: Eliminate the do-it-all nature of the bill. Specifically, the bill tries to be a good business transaction for the taxpayers and a bailout of the banks. I think a better bill would pick one or the other -- the taxpayers or the banks. If it's a bailout, it might as well go the whole way in bailing out Wall Street so that at least for the rest of us credit becomes easier again. Or if it is not a bailout, and the point is that the taxpayers can make some money off the assets, let's cut the number way down from $700 billion and invest at low levels so taxpayers maximize their returns.
The next bill should be a bailout, or it should be a seizure of assets. One or the other. To me an intricate balance is too big a risk. A bill that tries to attain both goals, could end up attaining neither.