Reply #49: The problem with that is, simply, it'd never fly.

[Nicholas D Wolfwood]

I'm not saying it's a wrong approach, but politically speaking, it's having the government become far more of a business entity than most people are comfortable with at this point (cue cries of socialism here.) And merely insuring the loans isn't going to solve the problem - that's been ruled out for quite some time, since the House Republicans had initially tried that and were rebuffed by pretty much everyone else (Dems, White House, Treasury, Senate R's.) I don't think insuring the loans would work anyway, as we're talking about a boatload of already-bad ones causing much of the problem in the first place, as banks lack the liquidity to provide new ones (ie. they don't have the cash on hand to back up new loans.) The only way to solve the problem is to dilute the pool, so to speak, either by injecting enough funds into the market that the stench of the bad loans is covered up, or through buying out the bad loans and somewhat removing it from the system. Long term, it can, and probably will subside on its own (with greatly enhanced regulation,) but we're talking really long term and not before things get very, very ugly - like depression-era ugly.

This is the kind of debate I'm okay with, by the way, trade actual opinions and proposals and not just shooting this down out of hand because it's Bush's idea or because it's "bailing out Wall Street." Those are, frankly, petty and meaningless games to be playing when we're faced with a genuine crisis. We can have that battle after we gain stability, and hell, I'll be happy to even lead that charge when the time is right.

As far as a proper use for that $700 billion - heck, I could come up with a good use for each dollar of that amount, most likely. Our infrastructure blows (education, energy, transportation,) and I truly believe that our only way out of this mess, long term, is to invest heavily on that. Directly creating new jobs and ensuring our children will be skilled enough to take on the jobs of the future (and today) will be our best bet, not relying on some mythical invisible hand that never really existed in the first place. I doubt we disagree on much of that. I doubt anyone on this board who opposes the bailout disagrees with that sentiment. The disagreement, as I see it, comes from a fundamental misunderstanding of the situation.

This is the problem with having a President with no credibility and who only knows how to fear-monger to move public opinion. Only the President of the United States can truly sit down with the American people and explain it to them, thoroughly and calmly. Neither Obama nor McCain can send this message - it's too politically charged of an environment for them. Nor is anyone else independent enough or qualified enough to do it. This failure is the cumulative failure of the Bush administration, plain and simple.