700 Billion or more gone if we don’t act. The Democrats are ready to sit down with the Republicans and talk turkey. Our turkey:
“We now have between House and Senate Democrats an agreement on what we think should be in the bill, and we have a meeting scheduled at 10 a.m. tomorrow to meet with the Republicans,” said Frank, chairman of the House of Representatives Financial Services Committee.
More than 180 economists, including David Levine and Michele Boldrin from Washington University, have signed a letter opposing the $700 billion financial bailout now before Congress. They see “three fatal pitfalls” in Treasury Secretary Henry Paulson’s proposal: Its fairness, its ambiguity, and its long-term effects on the economy.
We need to take the long term impact on the economy into account (emphasis mine):
The economists, who include three Nobel laureates, are especially worried about the long-term effects:
If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
We’re on the verge of making a very expensive mistake.