While I am against all bailouts, if the Feds had taken all of the bailout money and applied it pro rata to every mortgage in America, with a similar reduction in the monthly payment, we would be in better shape. The banks still would have received the money. Many of the toxic mortgages would have become viable again. Homeowners would have more equity in their homes thereby reducing the incentive to walk away. And, the reduction in the monthly payments would have been an immediate boost for the economy. Finally, those of who work and pay for all of this would have, at least got something for our money.
I agree, and for the same reasons I support a mass refinancing of credit card debt. If the bailout money was used to refinance 18%-28% credit card debt down to 10% or so, people could agressively pay down the debt, and then spend on other things, reviving the consumer segment of the economy.