Why $700 billion Won't Work

October 8, 2008

Why $700 billion Won't Work

Nouriel Roubini, one of the economists who successfully predicted the subprime crisis years ago, has been allowing full access for the time being to his blog: RGE Monitor.

Roubini, once considered a perma-bear (a perpetual pessamist about the economy) has recently looked at banking crises historically to find the best way to prevent a total economic meltdown.

Surprise, surprise, he found that the US $700 billion plan may not be the best way to go. Instead, he suggests that the way Scandinavian countries (Norway, Sweden, Finland) dealt with previous crises, may be the better method.

To understand how this works on a more understandable level, Planet Money, a spin-off of the award winning radio show This American Life has been putting out some great radio about the credit crisis and solutions.