Don R

Bailout Cost, per Taxpayer, by Income

If you carefully read the proposed legislation you will note three things:
1) The institutions eligible for aid are anyone other than a foreign central or entity owned by a foreign government. (check how the term "financial institution" is defined)
2) Troubled assets eligible for purchase can be anything and anywhere. There is no restriction to domestic mortage backed securities. (check how the term "troubled assets" is defined.
3) The $700 Billion limit is a line of credit limit, not a cap on the amount of assets that can be purchased. The treasury can sell assets for 90 cents on the dollar and still consume the full $700 Billion, as long as it does not own more than $700 Billion of assets at one time. (check the
authorized increase in national debt to get an idea of the real exposure.)

I cannot stress strongly enough that it is important to read the actual 106 page document, and not rely on second hand interpretations. Pay particular attention to the definitions section.