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The alternative will be the govt. taking over home lending by being the only secondary market for banks to recapitalize. The plans involving the govt. buying the securities can't guarantee that the banks will start buying these securities in the future. Banks operate with a herd mentality. They are all afraid to buy these securities and will pull back on credit lending. IOW, buying these securities will not guarantee any loosening of the credit markets.

People extend credit to make money.

And when people's credit is good, they will get credit.

Too much bad credit has been extended (with the Gov't interfering) and we are paying for it.

Credit isn't a right!

And when people's credit is good, they will get credit.

Unless you're a well connected investment bank.

When I read that Paulson was conferring with Goldman Saks (who had a 20B stake in AIG) prior to the bail out of AIG I blew my top. This whole thing is so "in bred" by a bunch of northeast elitists and the rest of the country pays the price.

Very credible people have presented alternatives that don't cost anywhere near as much and do not involve the govt. taking so dramatic a role in determining who wins and loses, yet these ideas are ignored or just given lip service. It is very frustrating.