Peter Dorman at Econospeak has a summary of economists’ reactions to the Geithner Plan that he concludes with this observation:
The problem with the Geithner plan, as with all other varieties of bailout largesse, is that it depletes our limited resources with no particular likelihood of success. I would ask everyone to consider what our situation will be if the dollar spigot is exhausted before the financial system is back in approximate working order. My candidate adjective: dire.
This highlights my concern of economists’ views of our current situation. They’re acting as though continual tweaking were a political possibility. It isn’t. Indeed, the tweaking itself is deleterious. You don’t fine-tune the economy.
