During 2008, the U.S. financial system experienced extreme stress and came close to paralysis. The long-term health of the U.S. economy requires more than higher government spending, targeted Treasury bailouts, and unprecedented lending by the Fed. This article recommends four reforms to regain and maintain long-term economic health: (1) The markets for trading credit and its derivative instruments must include a clearinghouse; (2) the markets for credit and its derivative instruments must become public and transparent; (3) the size of companies must be limited, or certain activities that can lead to failure must be prohibited, so that no company can be allowed to become “too big to fail”; and (4) the observed failures in financial agents’ monitoring and in accounting practices must be rectified.