Why the Current Draft of the Bill Sucks

Here are the issues:

1. The economy needs credit liquidity to stop from shutting down
2. That liquidity can only come from the Treasury
3. How is that liquidity put into the market?

The current proposal has the federal government (US tax payers) buying $700 billion worth of sh*tty loans from US banks. The market would then go up, the 'toxic' loans would be off their balance sheets, and people would be more willing to lend--credit would come available.

But is that really the best way to get credit into the market? Bush has been trying to pin this as a 'rescue plan' rather than a 'bailout.' But the truth is that it's both. And history has shown (Chrysler, and Long Term Capital Management) that bailouts merely solve temporary symptoms, and leave the larger problem unaddressed, and festering, only to explode later.

So, how to get that liquidity into the market? There are credit-worthy individuals, business, and small business out there. And there are clean banks out there. Let the federal government take the time to get that liquidity to those parties through clean institutions.

It will be complex, and it will take time, and it will be painful to see the market drop while it does, but at some point, we must fess up to the recent ills and face the real valuation. If we don't, we're only pushing it off to future generations.