One of the most aggressive proposals for mowing down the current financial crisis has the backing of a number of people in Congress. For now, it appears that Henry Paulson and Ben Bernanke also like the idea.
According to The Wall Street Journal, "At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies." The Treasury may buy the asset at a significant discount to their original values and then sell them into the market once they have regained some of their value. Of course, the program would put the federal government at risk because the value of hundreds of billions of dollars in assets may never entirely recover.
What is not clear is what the government would get for its trouble. Some proposals would have the Treasury taking partial ownership in banks that sold it very large amounts of toxic assets.
The taxpayers would ultimately be on the hook for all of this money. There have been a great many people in Washington who object to that.
But if someone could poll taxpayers, would they rather have their payments move up a modest amount? Or would they prefer to possibly face a period similar to the Great Depression? Odds are, they would favor opening their wallets now to avoid years of economic hardship.
Douglas A. McIntyre is an editor at 24/7 Wall St.