GASPing at the Geithner-Summers Plan

Like the acronym for the Geithner and Summers Plan — GASP — in the article by Laurence J Kotlikoff and Jeffrey Sachs. And “gasp” is indeed the reaction to the $1 trillion plan to deal with financial institutions’ toxic assets.  As Kotlifkoff and Sachs note, the plan can easily be gamed by participants:

The situation is even worse that it looks, however, since the GASP can be gamed by the banks that own the toxic assets to boost the purchase prices for their bad assets even higher than has been suggested to date.