I don't understand economics. I am struggling to make sense of all the talking head chatter. It's probably wrong, but this is what I take away from it...The "bail out" means our taxes will create a well of money or "collateral" for the banks that loan money for small business loans and mortgage loans. Without credit for business expansion and housing our economy stalls.  OK...I understand the problem so far. But...these same banks that must issue credit to keep our economy going, made bad investment choices in the last few years. We have to have "faith" with these same poor money managers to take our money and invest it wisely this time around. While most of America is happy to have "faith" in something unproven, I am not one of them.

I find it ironic that that the same banks that due to loan regulations had to turn me down for a conventional  mortgage because I am self-employed and therefore "high risk", turned around and invested in "Packaged" Mortgage Securities made up from the "high risk" sub prime loans they are regulated against making.  I realize the mortgage department and the investment department in a bank are different people, but come on...what a bunch of hypocritical dummies!

Seems like we are in a "catch 22" situation,  The prices of homes on the West Coast and East Coast are still artificially inflated way beyond their actual value.  If the bubble these home values are floating around in bursts, millions more homes will go into forclosure. Why would anyone make payments on a million dollar home loan on a house valued at $200,000.00? At the same time, it will be very risky to make new mortgage loans on homes whose value is still  "artificially and unrealistically inflated".  I would resent my tax dollars being used to collaterize these risky loans.  Seems to me like the "bail out" would just be prolonging an inevitable housing market correction and putting good money after bad.  

My thought processes must be flawed though, because following my logic would mean the real estate market would have to collapse on both coasts and become more in sync with middle America real estate values before our economy can recover and the bail out is just another scheme to move money from the working poor to the rich.