Uncle Sam (and Hank) to the Rescue

Uncle Sam (and Hank) to the Rescue

After seeing numerous investment and commercial banks (even an insurance giant) come out of the woodworks with huge funding shortfalls, Treasury Secretary Paulson submitted the administration's solution in hopes to put a halt to the credit crisis. One of the centerpieces of the program would be a mechanism for a government entity to take bad debts off the balance sheets of companies. The yet-to-be-named agency would resemble entities that were created during the Great Depression and S&L meltdown.

The severity of the crisis has virtually everyone clamoring for ‘something' to be done. By the details released thus far the Treasury/Fed plan appears well structured and has a good chance of mitigating the problems. However, with crises come cries for new regulations. These articles (here, here and here) offer good perspectives on why policymakers need to take their time and study things thoroughly before possibly jumping the gun and passing well-intentioned laws that end up doing more harm than good.

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