Smelling "free money", everyone is lining up for a taste of the pie:
Senator Christopher Dodd, the Banking Committee chairman, said the plan's framers should consider the full debt load of U.S. consumers, possibly including credit cards.
"We have got some strong concerns about what's included here,'' said Dodd, a Connecticut Democrat. ``They haven't limited this conversation exclusively to residential mortgages. So I know that other securitized debt is also going to be considered.''
In other words, in the best Washington political tradition, there must be something for everyone on this bailout. So rather than the $500 billion of 48 hours ago, or the $1 trillion of 24 hours ago, expect to see the dollar figure truly mushroom.
This was a bad idea to start. As others have noted, if we remove the element of risk from the markets, there is no premium for making good decisions. "Hell, John, let's really shoot for the moon with this one...if we flop, the government will bail us out."
Then there is the cost. I for one am very curious to see if they can actually raise this kind of money from our creditors. Face it, the Federal government is going to absorb a lot of bad debt. That's what sunk companies like Morgan and Lehman. After doing so, why should US government debt remain rated AAA?
I opening the bidding at $1.25 trillion. Do I hear $1.5...?