Are people confused about what the bailout means? ?

Not so much confused as uninterested in any facts that may oppose their dogged view that they will not accept any solution that costs them money. The fact that it is costing them right now, they refuse to believe. They will not tolerate anything that disrupts their rapacious appetite for more and still more. They refuse to be evicted from their fairytale existence.

That isnt the problem. I understand the problem perfectly and how this money would help. The truth of the matter is though that credit isnt the big problem, its over use of credit. Private markets got themselves into this mess by doing the very thing the government is trying to get them to do again. What we need to see IS tighter lending standards. On top of all this, home prices are massively inflated. The market is correcting this situation. Considering the lowered cost of home building (cheaper, stronger materials, better equipment etc), homes cost twice what they should compared to the change in average income since the 1950's. In many areas, homes stand to lose 50% of their value or close to before they even reach the cost/income ratio they had 50 years ago.

700 billion dollars is only ~120 billion less than Wachovia had in all its deposits, and is almost half of what the government takes in for a year. This is easily enough money for the government to form its own bank and start lending, hire the best employees laid off from behr, lehmen, etc, let the market take care of home prices, and let the banks fall just like they should in a capitalist leaning country.

Also this recession is only the beginning of a much broader trend. Our economy has a TON of baggage in the form of a whole bunch of people with useless college degrees who demand to get paid more for never producing a single thing. The basis of any real economy has to be food, raw materials, construction, and manufacturing and we have lost a ton of those jobs in favor of service jobs. Now we are seeing the Chinese and Indians beginning to compete in these areas and I will say right now, we are no more intelligent (actually less so by IQ) and soon will not really have any advantage in these fields which means a lot of people who are sitting in offices monitoring sales trends and crunching data will have to move into one of the aforementioned industries. Maybe not for awhile mind you, but sometime in the next 20 or 30 years.

Right - so banks, although they are sitting on piles of cash, are too scared to lend. And to fix that, we are going to give them more money? Why not just back the securities with insurance? Instead of buying "worthless" assets, why not just back the ones that actually prove worthless? Why not up the FDIC insurance on accounts from $100k?

There are many things that can be done to solve the "credit crunch" that do not require $700 billion of tax payer money.

The bill also elevated the powers of an unelected official way to high for my comfort zone.

EDIT - is this the Senate bill? It's some 400 pages long, so I haven't gotten the chance to read it....But I know the House bill only ended the "golden parachute" for NEW executives. The current ones could still take their parachute ride out - was this issue addressed in the new bill?

And it can be argued that government intervention helped to prolong the effects of the Great Depression.

I would like to answer your question as a small business owner and as a taxpayer.

"Although the source of the problem came from Wall Street and poor mortgage decisions by unqualified home buyers, it now a American public problem. It has an adverse effect on EVERYONE."

That is correct. Unfortunately, most suffer because most borrow without true value to secure a loan. We are going to go our separate ways on this issue--the essence of "real value" and why it is so important to understand that the bailout will do vast harm by creating more debt float.

"The problem is that banks are unwilling to lend money to businesses because they need to keep liquid cash on their books to remain solvent due to the bad mortgages they are holding."

Here I disagree. I had no problem getting a short-term $30,000 loan to cover start-up costs for a project I started today. Why didn't I have any problems? Because I started my business the right way: Instead of using debt to float it, I decided to grow it at a perfect pace until I accumulated real assets to back my loan. I guaranteed it myself, putting up the collateral that I chose to save. I did not demand that taxpayers float my business. The bank likes me. I could have gone the SBA way, but I felt that unsecured, taxpayer-backed loans are only an incentive to be reckless. I've seen small businesses go under and not pay the SBA-backed loans. They were poorly managed.

"When banks are reluctant to lend money, small businesses who often use short-term loans to make payroll, research & design, market, transport, etc. cannot get the funds they need to stay in business. As this occurs, jobs are eliminated and/or these businesses fail completely raising the unemployment rate and overall economic hardship for everyone."

Small businesses relying on debt float are ticking time bombs. A lot are on SBA and don't add any real value. They accumulate nothing. They don't plan, thus they don't profit. They will eventually fail. High debt-to-asset ratios are losers. We small business poeple who put up real value for loans and guarantee them ourselves without accounting gimmicks don't like them because they cause the most job losses.

An honest business is the best business. Honesty is not a matter of good intentions unless those intentions are backed by a person's diligence as shown in value exchanges.

Although I do understand the nature of the bail out and it's importance, as written the legislation would not have the desired effect of maintaining balance.

The recently rejected legislation gave approval for the treasury to hold 700 billion dollars worth of asset at any given time. This would give th treasury department the ability to prop up certain industry, ignore other and sell of private concerns for pennies on the dollar, all at the cost of the tax payer.

Basically you are giving the government a blank check to get involved int he market. This will allow for widespread corruption, as it is understandable the preference would be given to companies which the governemnt has an interest in. Likewise the false market will only stand to devalue to the dollar.

No matter which way you look at it we are screwed. IN the short term the bail out will help, in the long term we will suffer. Or we suffer in the short term and make it up in the long.