Good Luck, Jeremy Stein

One of the problems is that these banks don't want to take the hard medicine of writing down the loans, and another problem is that taxpayers may never recover the dollars put in the banks. How about buying tax loss credits from the banks? That would motivate the banks to write down bad assets (because they would get the credit), and by selling the credits, the banks would get recapitalized, and taxpayers would have a better chance of getting their money back (in effect the future tax rate on banks would be raised).