Senate Passes Bailout Package. Some Say $700 Billion Isn’t Enough

Last night, as I’m sure you are reading all over the place, the Senate passed the bailout package. The thing, now, though, is that some say that $700 billion just isn’t enough to inject liquidity into the markets and stimulate the economy. Here is what Bloomberg reports on the stock market’s tepid response to the Senate bailout package:

U.S. stocks dropped for a second day as a jump in borrowing costs and reports showing a worsening economy spurred concern that the government’s $700 billion bank bailout plan won’t be enough to stimulate growth.

Quite frankly, I’m not sure that any amount of money is ever going to really help things in this economy. The economic stimulus checks sent out earlier this year didn’t really provide a long-term fix, and I’m not sure that any amount of borrowed money is really going to change things. Constantly borrowing money to sustain an economy based on debt is a recipe for instability, and throwing increasingly large amounts of money at the problem won’t change things. At least that’s what I think. But I’m not an economist.

Alan Greenspan things that we can rebound from this. But only after we do something about financial firms and their accounting practices. Stock Market Funding reports on Greenspan’s most recent public comments:

Greenspan said the current credit crunch is due to a lack of trust in financial firms’ accounting records and to related questions about banks’ capital levels during the past year. But that trust should resurface, he said, and investors “will dip hesitantly back into the marketplace.”

SO, shouldn’t we require better accounting rules? Wouldn’t that ultimately help things in the long run and fix some fundamental problems with how things are done? But before the government can pull the accounting mote out of Wall Street’s eye, it better look to the accounting beam in its own eye. (Hat tip to markzero for bringing this to my attention.)