Following on Larry’s point from earlier. Another thing that people don’t seem to understand is that $700 billion is (hopefully) for show. Paulson needed the figure for Wall Street. But, given the way the world works, he’s not going to be able to spend that much money anytime soon. If he wanted to spend $700 billion by Christmas he wouldn’t be able to. Also, something I was fuzzy on that people have explained to me over the last two days is the Paulson is not limited to buying bad debt in this plan. He can inject equity directly into firms too, if appropriate (but since it will involve essentially a government take-over on punitive terms, it will probably only happen with entities on the verge of collapse). I agree with all the oversight and reporting requirements that Congress has added. They are entirely appropriate and necessary. But I also think Paulson needs maximum flexibility to use every tool at his disposal to attack the problem.

About the Author
Rich Lowry is the editor in chief of National Review.
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