What if we took our 700 billion and created a new Bank of the United states, backed by the federal government that offered a baseline of financial services at reasonable, but less than exceptional prices. It could be most cheaply based online. If the economy was good few would use it, but it would serve as a backstop in times such as those we face now. As far as the junk "assets, " this bank would be able, if the price was to its advantage, to purchase those, disassemble them and resell or restructure them with the original buyer. If financial institutions fail, the government could seize any remaining assets and deposit them in this bank. The current 700 billion dollar plan runs the grave risk of creating huge ghettos of foreclosed neighborhoods that may never be able to return to their previous vitality.
Comments are closed for this post.
