Give Main Street the money. We won't piss it away. Unlike the banksters.
So here's the best policy. Unwind the $23 trillion committed by the Treasury and the Fed. Let the market operate. It wants to close down all the "too big to fail" institutions. The market is right—these institutions are not necessary, indeed, they represent the biggest problem facing the financial sector. Their CEOs instinctively recognize that these institutions serve no useful purpose—which is why their efforts are directed to creation of ever more dangerous and socially destructive financial products. As I have said before, Washington needs to get on the right side of the leverage ratio: for every dollar of real productive activity and income generated, there can be $30 or more of leveraged financial bets. Rather than trying to make all of those good, it makes far more sense to allow default to wipe out the bets, and then work to save the productive activity, jobs, and income.
I know that Wall Street's protectorate, led by Geithner, Rubin, and Summers, will claim that failure of the behemoths will create an economic disaster. But that is not true. All real economic fall-out can be contained and the economy will emerge much healthier. Replace Wall Street's life support with support for mainstreet. Start with a payroll tax holiday (don't collect any payroll taxes from employers or employees for the next two years); add $500 billion for direct job creation to immediately get to full employment; add another $500 billion for relief of state and local governments distributed on a per capita basis; and give all mortgaged homeowners the option of immediate default with a "rent to own" plan. True recovery would begin immediately, and we'd be out of the mess by summer.
Remember: With the 2009 bankster bailout bonus money, Dems could have created 5 million jobs at $30K each. And the bailout bonus money was our money. So why did it go to the banksters, not us?