Sadly this is what should have happened the day Paulson presented his plan. It should have been wadded up up and thrown in the trash.

The question now remains is there time for a completely new plan?

Strains worsened overnight in the credit markets, the plumbing of the economy that many businesses rely on to finance routine expenses like utilities and payroll. Banks sharply increased their lending rates on short-term loans, sending Libor, a globally watched benchmark rate, to its highest level ever. Several measures of anxiety in the market reached record highs. And new injections of money into the markets by central banks failed to dampen a hoarding mentality among financial institutions.

"The money markets have completely broken down, with no trading taking place at all," said Christoph Rieger, a fixed-income strategist at Dresdner Kleinwort in Frankfurt. "There is no market any more. Central banks are the only providers of cash to the market; no one else is lending."

.. while Rome burns and credit contracts to the point that we tip into a Depression, we won't have the money to pay for anything anyway.

Hey, but at least we'll still have our progressive street cred.

And that should start with running on the plan, and not passing it before the election.

This single comment shows you just don't understand what's going on.

This is not a long-term bailout.  This is a short-term bailout to stop credit markets from tanking.  The same credit markets that run our economy.

Watch this and get back to me:

http://es.youtube.com/watch?v=Wj_JNwNbET A

It's an hour long, but you could use it.

Also -- since you have so much disdain for the bill, how about a few sentences of insight into why you hate it to much?  Something a little deeper than partisan propaganda.

Note that I don't think the bill's perfect either.  But it would be nice to have informed discussion about why it sucks rather than uninformed discussion.

or the list of books you've read to formulate your conclusions? I'm baffled how people with no real background feel they know what will solve this thing, or even what's ruly at stake...And by all this wait and see, taking this money away from other things will mess our priorities up talk, it's pretty apparent you need to read up more...Is the best plan on the table yet, NO, but your blockquote is just silly...Just remember, if your down by 21 and at 4th and 15 in the Super Bowl with 5 minutes left, punting is probably a silly call.

There has been a segment of the American population that DEmocratic leaders have been paying lip service to but not really showing a fraction of the urgency that they show to this bailout. Remember for how long they have been talking about public education reform or universal health care? Do you think generations of the same segment of population more adversely hit by the lack of movement on those fronts are any better off than the people affected by a lack of bailout?

So why the urgency for just this bailout they are not even sure can work? They have already been wrong on the movement of the stock market. Is tightening credit really such an awful thing? People who had no business getting credit got too much of it already.

...to ensure there would be no option left but to destroy the social safety net in the U.S. This is the GOP's attempt at the final undoing of the New Deal.

That their own backbenchers killed it was a shock to the R's in charge and possibly the one last chance we have to get it right. While I doubt the Dems will have the cojones to follow through with a plan of their own, hope springs eternal.

I don't think you understand the plan.

It is not going to cost anything close to 700 Billion.   It will likely not even be on budget, and as a result will have zero impact on the actual budget deficit.  

There will be assets acquired when the plan is implemented.  The best guess is that these assets are worth MORE than $700 Billion in a properly functioning market.  

I will repeat: there are things I don't like in this plan.  I cannot believe that Paulson is going to be allowed to continue as Treasury Secretary, for example.  

This won't cost anything close to $700B (a lot of redeemable mortagages, final bill should have strong pay-back requirements).  As pointed out above, a major recession will hamstring Obama's agenda more than this.

Yes, the bill yesterday had enough flaws that it was worth rejecting, but strengthening oversight and the elimination of golden parachutes, plus more assurance that the taxpayers are first in line for paybacks can still make a workable solution.

realize that he will be hamstrung for most of his first term if this passes?

It will effectively guarantee that there is no money for anything new that he might want- meanwhile he will have to continue to fund the war until he can get the troops home.

This bill could very well destroy an Obama presidency before it starts.

Interesting.  Looking forward to seeing that.

Let's start by getting new leadership in the House and the Senate.

Pelosi and Reid have proven over the last two years they are bringing knives to a gunfight.

We need aggressive, intelligent progressives who are willing to stand toe-to-toe with the minority leaders and not blink.

Nothing is going to get accomplished if we continue to be led by a couple of feckless empty shirts.

So you clearly don't like this plan, but what would a progressive version look like?  You and Kos have nothing constructive to say besides 'no way', and you're now openly mocking Obama for coming down on the side that doesn't endanger millions of jobs.  Digby appears to endorse an extremely vague modern day New Deal, which, I'm sorry, makes absolutely no sense and betrays a fundamental lack of understanding about the issue.  The new deal was designed to end the great depression through job creation, emergency relief, and social programs.  It also included reforms to prevent the financial abuses that caused the stock market to crash in the first place.  The ND was fundamentally reactive to a total economic collapse which had already occured, whereas what we need now is something proactive.  We still have a good chance of preventing a depression or at least deflecting the the blow that the market collapse will cause.  

I'm all for social programs and reform, but the fundamental issue right now is the illiquid toxic paper clogging up the markets.  That's what's going to fuck our economy, and any program that doesn't directly address that issue is not going to stop a collapse.  This is a hard pill to swallow, but if you're going to oppose it, why not talk about specific proposed alternatives?  The urgency of the situation was probably exaggerated, but that doesn't mean we don't need to pass something ASAP.  Creating jobs is great.  Ending the abuses that caused this situation is likewise great.  But there's a ticking time bomb in our lap that we have a chance to defuse, and that shit is secondary.  Advocating a bill to bring us out of a depression that hasn't happened yet rather than preventing it from happening in the first place is downright stupid.

Jerome. You've been courageous, if some would say foolhardy, in breaking from the political correctness of the blogosphere in the last few months. I would say this really is a time to depart from Kos and Digby again.

The scepticism they avow, with it's mingled threads of social retaliation against fat cats, short term media strategising, and plain ignorance of economics, is not the way to go now.

I might be wrong. What do I know? But I've a good sense when the blogosphere moves into groupthink, and I'm pretty sure this is one of them.

This mirrors my thinking.  Pass a stop-gap, run on the final answer and keep the options open for January.

I await with bated breath.  Are there any details about this plan anywhere?  Why would OpenLeft endorse 'five simple steps' without knowing what they are?

There is no chance of getting this through congress and signed by the president.

Is Blumenauer on board with it?

Why not nationalize failing banks and take-over the role of granting loans directly to businesses that are not able to secure loans elsewhere.

If the problem is that businesses will fail for lack of the ability to procure loans, then the government should just step in a take on that role.  Why try to go about it in a half-arsed way, buying CDS and other toxic securities in the hope that this will stabilize the credit markets.  Of course, all those sleazy, dirty, filthy, money-grabbing egoists in the financial system will take their piece of the pie with each transaction.

Why can't government just go into business and compete with the other banks directly in giving loans to the businesses directly.  It seems before all this crazy derivatives craze hit Wall Street that the banks made a decent living this way.

credit, then there won't be money to buy a bowl of cornflakes, let alone anything else.

Extreme right and left wingers seem not to mind getting into a pissing match over this and letting the ship go down in the process.

That is the same old politics we need to change.

The senate is evenly divided, and Bush can veto, so we can't get everything we want. So fight for what you can, give up what you must, and pass something.

Here's an informed take on the whole thing.