What happened
The U.S. is preparing “contingency” plans to further stabilize Citigroup, The Wall Street Journal reported. Citi, recently the world’s largest bank, now ranks 184th among financial firms worldwide, by market capitalization, with its stock trading around $1 a share. (Bloomberg) Republican senators John McCain and Richard Shelby said Sunday that the U.S. should let some large U.S. banks fail; Shelby mentioned Citigroup. (The New York Times) (Watch Shelby on ABC This Week)

What the commentators said
Sen. Shelby is braver than I am, said Kevin Drum in Mother Jones online. Nobody really knows what would happen if we let Citi fail, but when we let Lehman Brothers go under, our “gamble failed spectacularly” and the global financial system “nearly collapsed.” And Lehman was much smaller than Citi. “Call me a wuss,” but I’m not willing to gamble on a fiscal “nuclear meltdown.”

I might be, said Zac Bissonnette in BloggingStocks. If the alternative is eternal life support, "some bigger banks should be allowed to go under.” The problem is how to choose which banks to bury. “Draw lots? Eenie-meanie-miney-mo?” That might be just as “valid” as the “piecemeal” and confusing steps the Obama administration is taking.

And it might work with smaller banks, which the FDIC is good at closing down, said Justin Fox in Time online. But how would we shut down Citigroup? Citibank has only $241 billion in U.S. deposits—which the FDIC could handle—but the larger holding company has $1.797 trillion in liabilities, under the jurisdiction of lots of foreign governments.

Without actually letting Citi fail, said Megan McArdle in The Atlantic online, it’s impossible to know which is greater: the cost of keeping it alive or letting it die. Both could cost trillions. It seems that the Obama team is betting that “implying you won’t let the bank fail” will be far cheaper than either option.