[fabsroman]

Tater,

What you are hearing about is the initial $700 billion that was supposed to be used to bailout the banks. Essentially, that money was supposed to be used to buy bad mortgages from the banks so that their balance sheets would look better and they could go out and raise additional capital from outside sources. Now, what Paulson is saying is that they (i.e., the gov't) are not going to buy these bad mortgages from the banks and hope that not all of them go bad and that the gov't can recover on some of them. Instead, what they are thinking about doing is buying an interest in the financial institutions so that if the financial institution does well down the road, then the government will get its money back, and maybe even a decent return on the investment.

What the democrats are trying to do now is set aside $70 billion of the bailout money for the Big 3.

Everybody else,

From what I have been reading, the demise of the Big 3 would lead to about 2.5 million more unemployed in the US. Just think about what that will do to the economy? Two thirds (2/3's) of the US economy is made up of consumer spending. About a month ago, the forecast was that consumer spending would not start to turn around until the 4th quarter of 2009, and maybe even later. Throw 2.5 million unemployed people into the fray, and you might be looking at 2 years or more before consumer spending picks up, and I am not talking about getting back to a level that it was in 2005, just a level above what it is now. If you think your 401(k)'s and other retirement accounts look bad now, wait until 4th quarter reporting comes out from the retailers after the Christmas season. Me, I have already lost close to 35% in my retirement accounts, and the only silver lining is that I have about 30 years to make that back and that I will be buying cheap right now. I feel for people that are in their 50's with their retirement assets heavily invested in the stock market.

By the way, I am heavily against baling out anybody, because I know I will never get a bailout myself. However, for the government to just sit back and let all of this sort itself out might be a complete disaster.