http://www.washingtonmonthly.com/archives/individual/2008_09/014931.phpSeptember 29, 2008
By: Hilzoy
Bailout: The Final Bill
I don't think our Congress has faced a more important decision than whether or not to pass the bailout bill in decades, perhaps longer. (Summary here; CBO analysis here.) To state what is beyond obvious: it is incredibly important to set aside our preconceptions, whatever they may be, and really think hard about whether to support this bill or not. If you're easily alarmed by predictions of disaster, think long and hard about how long it will take to pay this off. If you're inclined to think that experts telling you that you need to fork over large sums of money are necessarily wrong, go back and listen to the audio clips near the end of my last post. Look at the graphs and the pictures. Think hard.
The costs of being wrong, in either direction, are staggering. This is not a time to leap to conclusions.
It is also, in my judgment, not a time for those of us who are not professional economists to imagine that we can sort things out without expert advice. I have read some bloggers who have no background in economics or finance, who are nonetheless sure that there is/is not a crisis, or that the bill under discussion obviously is/is not necessary. We're lucky enough to live at a time when experts provide good analysis very quickly. We should use it.snip//
For my part, I support it. There are a lot of people who I respect who are genuinely worried that we might be on the brink of a serious depression, and who think this would help avert or mitigate it. But I hate this.
It also seems to me to be really important to keep my anger focussed where it should be: partly on the people whose deals got us into this mess, but much more importantly, on the legislators who failed to do their jobs, or who allowed themselves to be seduced by idiotic economic theories which were, as it happened, in the interests of powerful lobbies.We're obviously going to have to pass some serious regulation to prevent this from happening again. I'm happy to postpone that: I think the next Congress is likely to do a better job in any case. They are also likely to pass some real assistance to homeowners; again, while I'd rather this happen now, since people need help now, I think the next Congress is likely to do a better job.
We will also have to have some serious deficit spending. Regulation might prevent the next disaster, but it will not help with this one. I'm normally a deficit hawk, but I have absolutely no problem with the idea of rebuilding a whole lot of infrastructure if it helps us head off the problems that are surely coming.
Which is all to say: I support the bailout, but I do not imagine for a moment that it will do more than mitigate the damage, or that we will work our way out of it without a whole lot more work, and a whole lot more pain.