The American People? Or…
The shareholders of the lending institutions?

If you don’t think it should be the lenders/shareholders is it because they lack liquidity to cover their mistakes or were they more stupid than that and now their solvency is at stake?

If solvency trouble is the order of the day, could they operate in the red under receivership, without a cash injection from the American People and possibly recover from there mistakes?

If not, could the American People loan the money to the banks at say, 6%, or maybe more depending on their credit worthiness?

Could our government exercise our right to create money, print some and issue it to the Fed at say, 6% for redistribution to the banks? (I would rather debase the Federal Reserve’s currency and make it up in interest payments from the Member Banks than pay taxes or go into debt over this mess.)

If not, won’t other governments step up to cover the hole in the money supply, for a fee along the lines of Fed rates?

Sorry for so many questions but I’m trying to understand. One line answers about how the entire economy would collapse if we don’t bail them out isn’t assuaging my anger, nor clearing my confusion over this mess.

I qualified for my house and I made a good deal on the loan. I’m not invested in the banking industry in any way, and I don’t want to have to pay for their mistakes. I did not sign up to share their risks, their shareholders did. Call me selfish if you want, but the alternative looks like the shining beacon of Socialism to me:
To each according to his need, from each according to his ability.

Meg:
That’s a lot to think about for a guy that sells widgets and gets paid on the spot. I understand what you’re saying except the part about loosing a central bank.
Are you saying that the action of the Fed/Treasury to shore up the FDIC would cost us the Fed somehow?

So China et al own a growing number of empty houses, and they’re still getting their interest payments on their investments correct? Selling empty houses ASAP seems urgent but will cause double duty cost to the American People (taxes to support bailout + diminished real estate value due to over supply)

Maybe the government is right in their efforts to keep people in thier homes, making payments at some level, and I guess we the people should make up the difference. Sigh…

Shouldn’t Fanny and Freddy have been more conservative when scrutinizing the contracts they were buying? Don’t they act like central banks also?

Thanks Meg, you’ve been very helpful!
Oh, one last thing.
What if the Men In Black used their flashy thingie on every American at once. Would the housing market instantly recover? There has to be a psycological component to all this too.

Thanks again!