In the interest of fairness, there are actually two daft proposals coming from the House Republicans. The first, which seeks to end the crisis by a 2 year suspension of the capital gains tax (?), is discussed here. The second, allows the government to sell insurance on companies who buy mortgage backed securities. These companies would in turn pay the government. Of course, the plan fails to mention how the government would price the insurance products, you know, given that one of the main problems is that nobody knows what mortgage backed securities are worth. What’s more, these might be hard to lend on, which would do nothing to alleviate the credit crunch, to say nothing of the cash shortage. Dumb.
Of course, this probably wasn’t quite as dumb as McCain’s valliant return to Washington to crack skulls. Instead of simply backing the original proposal and neutralizing the issue, he’s forced to pick between two manifestly idiotic proposals and the much more sensible plan that was basically ready to go before he came and defecated all over the negotiations. Good job.