The bailout reminds me of a Hail Mary pass thrown to the 5th wide receiver who is being covered by three defenders and is currently on the 5-yard line, whilst the team's future hall of famer is standing wide open in the middle of the end zone. Sure, the 5th wide receiver may catch the ball and yes, it would set you up for the field goal that could send the game into OT, but throwing the ball to a triple covered 5th WR instead of your wide open hall of famer is a recipe for disaster.
Ignoring my football analogy for a moment, perhaps the biggest problem with the bailout (aside from my usual gripes) is that the plan's proponents are setting improper expectations around the plan's benefits, by assigning benefits to it that the plan simply isn't capable of delivering. The problem with this is twofold: It suggests that the framers of the plan haven't a bloody clue as to the true dynamics of the economic malaise affecting the country, and it could potentially set the nation up for an even greater confidence crisis when the plan fails to deliver.
In order to illustrate this point further, let's take a look at some of the plan's alleged benefits:
Housing Prices: The housing boom was caused by bad lending standards, hyper-expectations and overspending. Remove these bad policies / actions / habits from the system and the housing market is going through a necessary (and proper) correction - a correction that won't be complete until inventories are back to historical levels, and the historical ratio of median income of housing prices is restored.
Nothing short of a Federal agency that demolishes unsold houses and/or gives people money to buy houses that are above their income range can halt the correction, unless (of
