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TARP + Tobin Tax = Successful Bailout Bill

By Anonymous

There have been so many alternative bailout plans proposed in the past 2 weeks that I can't even keep up. Some, obviously, have been better than others, and most are either bad policy or bad politics. Jeff Frankel's suggestion that Congress add a small tax on securities transactions to the existing version of TARP is definitely good politics, and it might be good policy too?it's at least better than TARP standing alone. Whether TARP is good policy all depends, of course, on the pricing mechanisms the Treasury uses.

A tax on securities transactions could very well win enough Democratic converts in the House to pass the bailout bill.

Full post as published by Economics of Contempt on September 30, 2008 (boomark / email).