At this point, there are only vague leaks about what Treasury will propose. Those leaks suggest that hundreds of billions will be spent with the intent of getting credit flowing to consumers and businesses. And the means of achieving this flow may include four tactics (which I assess below):

• Insure banks against extreme losses on mortgages and other loans. Neutral: Since the U.S. has had such a guarantee program in place since last fall, it should be clear whether it is costing any actual cash and if so whether there are any measurable benefits to it. So far, it appears that the costs and benefits are not obvious.
• Invest more in banks. Bad: This idea has already cost taxpayers money in the form of underwater stock and warrants. The basic problem with this plan is that it invests in zombie banks which do not lend it out. If the objective of the Treasury plan is to get credit flowing, it would be better to use money to create new banks.
• Help homeowners at risk of foreclosure. Neutral: This idea at least has the benefit of getting to the root of the problem -- which is that mortgage-backed securities (MBS) and other securities are pools of mortgages many of which are in default. But plans to help those with their mortgages over the last several months have floundered so it's not clear what is different about this plan. To be fair, it should be judged on its details which are not available.
• Lend Fed money to Wall Street so it can purchase toxic assets from banks. Bad: This plan appears to involve lending Fed money -- via last fall's Term Asset-Backed Securities Loan Facility (TALF) -- so that Wall Street can trade the toxic assets it created. But it begs the question of what price traders will pay for them. Pay more than the bank book value of the toxic assets and the Fed may not get its loan repaid, pay less and the bank takes a write off -- requiring it to raise capital. A better approach would be my colleague's plan for the FDIC to buy the 15% of bad mortgages inside the toxic waste which would put a real value on the MBSs and free banks to lend.

There is no doubt in my mind that getting this right is important to the future of our financial system. It's not too late to come up with something much better than the scatter-shot retreading of Hank Paulson's failed approach.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in Goldman Sachs securities.