Nationalization?, I mean "Receivership and Restructuring"

I think most people would agree that moving some banks to “receivership for restructuring” an appropriate euphemism for nationalization is what we need to do if we don’t want to delay the inevitable. The sooner we turn this around, the more and lasting impact the stimulus package will have. Imagine a scenario where the stimulus package does not work because the economy’s transmission mechanisms, in which bank is a huge part, did not work.

Another thing is that in a country like the US where political correctness has become an indispensable condition for legislative success, we tend not to and usually can not swallow too much at one time. That is why we only asked for $750B in TARP money even when experts know that it would not be enough. That is why we asked for $789B in stimulus package even when we knew Treasury dept. would come back for more. And that is exactly why we have to throw some money away at bad assets first (something we could have avoided in the first place) before we move on to Nationalization, sorry we can’t use that word, I mean “receivership and restructuring”

On the other hand, you can’t blame the process totally. It is often a wise idea not to give too much money to any agency at one time – look at what happened to Katrina money, the Iraq reconstruction money. And finally, maybe if those who came asking for money provided clear details on how it was going to be used and on how TARP and other expenses would be paid back, the public’s anxiety over the excessive debt government is taking on would have been soften.