Bailouts Mushroom, Impoverishing Taxpayers

The federal government is expanding its bailout of AIG to $150 billion, well above its originally-predicted cost, and planning to bail out other insurers, too. Congressional leaders also plan to bail out out the automakers yet again. Professor Bainbridge and the Wall Street Journal explain why this is a bad idea. Many of the bailouts over the past year are likely to have unanticipated negative side effects of many kinds, in addition to exploding the national debt. Here is a list of things the government could do to promote an economic recovery.