It seems that yesterday Chuck Schumer was saying that cleaning up the financial system by setting up a “bad bank” to overpay for toxic assets could cost as much as $4 trillion. I’m skeptical of the merits of these scheme at any price, but at $4 trillion surely it’s time to canvass alternatives in the most thorough way possible. As best I can tell, policy analysts and advocates have never previously had the opportunity to answer the question “if you could spend a few trillion dollars on something, what would it be?” Probably you could do a lot of stuff with that kind of money. Lots of people are, for example, skeptical that lump sum transfer payments make for effective stimulus but at these prices we could be talking about giving every man, woman, and child in the country $13,000. That would surely have some impact.
Schumer Says Bailout Tab May Reach $4 Trillion