Amidst the hubbub around the Stimulus package, it would be east to miss planned government spending package that dwarfs the $825 billion the House of Representatives approved yesterday.
This is of course the plan to rescue the still crumbling financial sector, where the New York Times quotes Chuck Shumer quoting government officials who "estimate it may take up to $3 trillion to $4 trillion to buy the bad assets" of struggling banks.
Tim Geithner's money quote:
We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system.
In other words, keep giving trillions of dollars to the institutions that caused their own demise, either directly or through the setup of "bad bank" institutions that take on the endless bad debt these banks have accumulated through their own greed and incompetence.
Paul Krugman calls this hope of preserving the status quo without nationalization Wall Street Voodoo.
It's time to take bold action. It's time to nationalize.
Read More