Paulson plan throws oil on fire

While Paulson wants to use the MFI to buy toxic assets, he may end up poisoning the whole US and the global economy. On the political side, there is growing frustration at seeing taxpayers' money being spent on nonproductive and exorbitant bailout schemes instead of being spent on productive and growth-generating education, health and infrastructure.

By becoming heavily dominated by subsidies to the banking sector, public expenditure will have very small impact on economic growth and social welfare. There is also growing dismay about increasing inequity when the government transfers private bank losses to the public while it keeps speculators' profits private and protects high salaries and gains of bankers, all this in a country that today has it worst income distribution in about 100 years.