There are alternative approaches to the bailout that would cost taxpayers less. But instead, Congress is expanding the bailout bill to stuff it with more pork and put more burdens on the already overstretched FDIC.
Economics professor Russell Roberts explains how the government spawned the mortgage bubble in the Wall Street Journal.
The bailout will cause inflation and the risk of future bubbles. And it may not do enough to unfreeze credit markets as former Bush Treasury Secretary Paul O’Neill has warned. A bad omen for the bailout is that the European Central Bank’s bailout strategy of flooding money markets with billions of Euros is not working. The government can’t fix what it doesn’t understand.