As Jeff Taylor’s reporting on Wachovia over the past few weeks has demonstrated, banks are in trouble and taxpayers are on the hook already. The question now is whether to spend $700 billion now (and get some return on the back end) to set a floor and allow healthy firms to get on with their business or to spend some greater or lesser amount while uncertainty drags on the economy and potentially creates a decade of economic strife.
There are better ways to do this than the bill before Congress, just as there are better people to become president than the candidates we have now. At some point, however, you have to make a choice and not just vote “present.”
UPDATE: Michael Darda in the WSJ this morning provides a third scenario for relieving today’s financial stress – long-term inflation.
