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Geithner's Flawed, but not Larcenous, Bailout Plan
Posted By Conn Carroll On March 25, 2009 @ 11:36 am In Economics | Comments Disabled
Commenting on Treasury Secretary Timothy Geithner’s latest bank bailout plan, Nobel Prize-winning economist Joseph Stiglitz told Reuters :
Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.
We think “robbery” is a little strong of a word, but Geithner’s “Public-Private Investment Program” (PPIP) is definitely flawed. Heritage analyst James Gattuso details  why:
There is not an imminent threat of a collapse. On the whole, financial markets are impaired but functioning. Indeed, many of these “toxic” assets are still performing despite problems in housing and other markets. Given the dangers of market intervention of this kind—not only to taxpayers in the form of massive costs but potentially to the financial markets themselves—actions such as the PPIP program should be a last resort, engaged in only when absolutely necessary. That standard has not been met.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2009/03/25/geithners-flawed-but-not-larcenous-bailout-plan/
URLs in this post:
 Reuters: http://www.reuters.com/article/reutersEdge/idUSTRE52N1IQ20090324
 details: http://www.heritage.org/Research/Economy/wm2360.cfm
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