RSS

Bailouts Work, But the Current Paulson Plan Won't

Henry Blodget, ClusterStock | October 3, 2008

The Laevan and Valencia study of 42 recent bailouts shows they can work, yet the current Paulson plan may not. ++ "Paulson and Bernanke should use bailout money to recapitalize the banks, not buy bad assets." ++ Furthermore, the US bailout is likely to cost $2 trillion, not a mere $700 billion. ++ Successful bailouts usually include debt relief for consumers and businesses, which the current plan lacks. ++ In Norway, Sweden, and Korea, recent bailouts helped, boosting stocks and decreasing inflation within three years.