Driving back from BWI last night, Faiz and I were listening to C-SPAN radio’s rebroadcast of Fox News Sunday where the panel had a heated back-and-forth about the propriety of giving Hank Paulson a “$700 billion blank check.” Now, obviously, I understand what people mean by this. But it doesn’t work as a metaphor. The essence of the “blank check” concept is that the check doesn’t specify how much it’s a check for. It’s blank. A $700 billion check is, by definition, not blank.
This does, however, raise the point that I don’t see any way, in practice, that you could actually limit the Bush/Paulson bailout to $700 billion. If $700 billion manages to solve everything, of course, that’s good. But if it doesn’t really work then I feel like the pressure to throw several hundred billion dollars worth of additional good money after bad would be hard to resist.