'Bad Bank' Funding Plan Starts to Get Fleshed Out

This plan is amazing in how warped the fundamental "logic" is.

Pension funds--which are pools of the public's money and a significant part of its wealth--are being asked to "save" a banking system that exists entirely because government policy created it. (Guaranteed deposits, lifeline to Fed, regulated assets, etc.)

This fundamental lack of understanding has already led, or contributed to, the destruction of over $7 trillion of household wealth. Yet Geithner is now asking people to use what's left of those remaining savings to secure a system that the government built, and which it has the means to sustain on its own.

He says he will offer "guarantees" against losses. Isn’t that the same thing as saying the government will just keep the banks functioning in the capacity they were created for: acting as agents of the gov’t to provide credit to the private economy?? Seriously, what is this bizarre plea for private funds?

It's bad enough that Geithner is asking people to put their life savings into supporting a creation of the government that the government itself could sustain without any negative impact to the public. But when he gives profit guarantees to billionaires--many of whom were part of this problem or had been instrumental in targeting these very institutions for demise—the whole thing become incomprehensible, especially when one considers that this is a Democratic president and administration purportedly fighting for the middle class!