Hooray! Congress has passed the $700 billion bailout plan. Let's all stand up and cheer for the, as I call them, Insane Clown Posse.

As everyone knows by now, earlier this week Congress voted down the bailout plan and the stock market promptly nose-dived. I guess the financial panic their vote caused changed the minds of some of the members of Congress.

The one good thing about this new bailout plan is that FDIC coverage on bank accounts has now been raised from $100,000 to $250,000. This should help stop some people from taking money out of their banks. The last thing this country needs is a run on the banks.

Will the plan solve the crisis? Not even close! The $700 billion plan is, at best, a small first step to solving the problem.

What exactly is the problem? In layman's terms, global money markets have frozen. The key overnight Libor lending rate has rocketed higher. Libor is the overnight rate that banks charge each other. I won't attempt to explain the details of Libor here, but suffice it to say that the Libor rate is a measurement of the health of lending markets.

The Libor rate has rocketed higher because trust is simply gone. Bankers do not trust each other because they have no idea of how many bad debts are hidden inside each bank. They don't know if the other bank they are lending money to will be there the next day. Bankers will lend to each other only at exorbitant rates.

This freeze-up in lending has unfortunately now engulfed the extremely important commercial paper market. The commercial paper market is the lifeblood of economic activity. This is the market where many companies go to get funds to keep their companies running.

The commerical paper market is like oil in an engine - it is needed for the engine to run smoothly. Even though most lending in the commerical paper market is very short term money - 30 to 90 days usually, even major corporations such as GE are having problems getting money.

Corporations aren't the only ones who borrow money in the commercial paper market. Today, California governor Arnold Schwarzenegger announced that Califronia has also not been able to get funds in the commericial paper market. California will need a $7 billion injection from the Feds!

This is why this crisis is getting into dangerous territory. If major corporations and governments can't getting funding, what chance will small businesses have? Small business is the lifeblood of our economy.

The same idiot bankers who got us into this mess are now making things worse by refusing to lend to anyone! They are in full panic-mode. They are putting all their money they have into short-term Treasury bills. This has pushed the rates on short-term T-bills to negative in some cases. The bankers are actually paying the government to hold their money! These people should be shown the door as soon as possible!

To solve the many problems we face, a lot more than $700 billion will be needed. Money will probably have to be injected into the commerical paper market along with injecting money into the banks for all the bad mortgage loans they own.

Additional monies will have to be put into the FDIC because there are a lot more banks on the brink of failure. Let's not forget too that other poorly-run industries are also lining up for bailouts from the government such as the auto and airline industry. I think we'll be fortunate if can keep the costs under the $3 trillion range.