The government's plan to come up with as much as $1 trillion to buy toxic assets from financial institutions better be enough to return the banking system to normal lending.

That's as much as the total income tax collected in 2006, according to the most recent IRS Income Bulletin published this month. Alternatively, the government could forego income taxes and put almost $11,000 back into the pockets of every American taxpayer.

Of course, tax forgiveness isn't a long-term solution. It only provides consumers with cash for one year. People will still need access to credit in subsequent years. Not to mention the fact that Obama's stimulus plan already gives back a big chunk of income taxes.

So the government will go to the taxpayer well one more time to help the banks. Sure, Treasury Secretary Timothy Geithner talks about creating a consortium of public and private money, but taxpayer funds are all he can count on.

This needs to be the last time the taxpayer foots the bill for the banks. If this doesn't work, then it will have to be clear to even the most die-hard nationalization fans that it's time to let some institutions fail and rebuild from scratch.

Frankly, it seems like the government has become an enabler of incompetence with its interventions in the name of credit system stability.

The most troubling thing about this "new" solution is that it sounds so much like what we were promised would happen with the "old" solution. I thought the original bailout through the so-called Troubled Asset Relief Program (TARP) was supposed to help clear out the toxic assets and get credit flowing again. Instead the government used a big chunk of those taxpayer funds "buy" about $200 billion of preferred shares in financial institutions to inject cash into the system without directly addressing the bad assets on the books.

So now taxpayers will have to help come up with a trillion more dollars for a toxic asset plan (I guess they'll call this one TAP?). If this goes through, the banks should have no more excuses for their reluctant lending of late.

Citigroup ( C), Bank of America ( BAC) and Wells Fargo ( WFC) can get back in the business of providing the loans that stimulate economic growth, in particular the small business loans that fuel job creation. JPMorgan Chase ( JPM), Morgan Stanley ( MS) and Goldman Sachs ( GS) can return to being the financiers of the free markets. And maybe the government can eventually go back to regulating instead of owning financial institutions (not like they were doing that much regulating to begin with, but that's another issue).

Heck, maybe the banks can use the TAP funds to repay the TARP funds. Why stop there? Let's take it a step further and require the banks to buy U.S. bonds with the money they get unloading their toxic assets on the government. At least that way they'll be helping finance their own bailout this time.

After all, we can't keep relying on the Chinese to buy the U.S. government debt being sold to cover all these bailout programs.

Hall is the editor of TheStreet.com. Previously, he served as deputy editor and chief innovation officer at The Orange County Register and as a news manager at Bloomberg News in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at The Journal-Gazette in Fort Wayne, Ind. His work also has been published in a variety of newspapers including The Wall Street Journal, The New York Times and International Herald Tribune. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.

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