Released: October 02, 2008

No silver bullets here

Source: Steven Pearlstein, Washington Post (Free Registration)

To hear it from critics on the left and right, the Bush administration and legislative leaders were in such a rush to pass a “$700 billion bailout for Wall Street” that they failed to consider much simpler, cheaper, common sense approaches.

In fact, all of their ideas were considered as part of a contingency planning process over the past year at the Treasury and the Federal Reserve, and given voice during the bipartisan congressional negotiations. Some of the ideas were incorporated in various forms in the bill voted down by the House on Monday, while none is likely to be the silver bullet that proponents suggest.

· Raise the limit on deposit insurance. The government had to rescue three large banks in recent weeks after large depositors—businesses and investment funds—began withdrawing money, raising fears of runs on other banks. One idea, now supported by the two presidential candidates as well as by the Federal Deposit Insurance Corp., is to raise the limit on deposits covered by the government’s insurance program from $100,000 per individual account to $250,000.

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