Final crisis - a layman's perspective

Niranjan Rajadhyaksha presents a very interesting primer on the US bailout with some history of such incidents earlier

Here are some interesting excerpts

But there are two other lessons. First, most financial crises are followed by years of sub-par economic growth. Second, the final cost of bailouts averages around 13% of GDP, according to a 2002 World Bank study cited by MoneyWeek columnist Adrian Ash this May.

Three things follow from all this. One, the US government has — for all the ambiguities in the Paulson package — done well to move fast and prevent further financial deterioration. Two, the US economy is very likely to have at least a few years of anaemic growth or recession. Three, the current cost estimate for the bailout — $700 billion, or around 5% of US economic output — is most likely too low.