Also, if you were smart and didn't buy into the real estate mirage, like my wife and I, well, you get no bail out, no relief, and your housing costs will most likely rise in the near future.

Here's what I believe: Help the genuinely needy, not simply the temporarily, but still comfortably, inconvenienced.  You think the real sad stories out there are going to be helped by this?  I don't.  It is a boon to the upper middle class and above.  Not much if you're just a normal schlub.

But there is a simple solution: punitive marginal tax rates on income. It worked after WW2, it will work now too

But what do average Americans really own? This report from the CEPR

...the ownership of stocks was particularly unequal. In 2004, the top 1% of stockowner's held 36.9% of all stocks, by value, while the bottom 80% of stockholders owned less than 10%. Additionally, stocks are a bigger part of the asset portfolio for wealthier households. For those in the top 1% of the wealth distribution, stock assets made up over 21% of their total assets, while stocks consisted of just 4.8% of all assets for households in the middle fifth of the wealth distribution. While stock performance is very important, on a daily basis it does not significantly affect average households.

I remember in the old days that when employment figures were released, if unemployment was low the stock market fell, as low unemployment represented upward pressure on wages. I've often thought that the 401K plans were in most cases an attempt by the monied overlords to co-opt average Americans wage-earners by making them think they had a stock in the stock market. So what if it's only $2,000.00 worth? Now all that Wall St. bs really matters to me!

Or do you mean simply taxing the money that the government is pumping into the very same companies they're bailing out?  Seems kind of pointless to me.

It reminds of something a propos from a talk radio show -- an elderly woman talking about some previous bailout and saying "I don't think the people should pay for this, I think the government should pay".

Who should "pay"?  Well, probably the owners (shareholders) of the companies in question -- many of whom are taking rather severe haircuts during the crisis.  And the CEOs and management who "drove" their companies into bankruptcy -- although sometimes it's hard to figure out who these people are (the management team at the time of the bankruptcy is often one brought in a few months before to clean up the mess).

If they paid fair value for it, the firms' balance sheets would be in no better shape than if they just kept the crap on their books.  So they're obviously going to be paying some kind of premium.

It seems logical to me that the firms receiving a premium should have to return that windfall over time in some fashion.  You can call it a loan, you can call it a tax, whatever; one problem is that if the amount of the repayment is fixed and determinable, it no longer counts as an asset on the balance sheet and you're right back to having a net capital problem.

Perhaps a different approach would be to begin enforcing a tax (or insurance premium) to clean up the next mess.  And we all know there will be a next mess.

That's how the FDIC fund on bank deposits has worked since its inception.  The problem with the FDIC is that while the fund is adequate to pay out the deposits of failed banks, it is woefully insufficient to bail of the entire bank, which has been the approach taken since the 80s.

Note that the SEC is also imposing a temporary ban on short-selling, at least of financial institution stock.

Paulson is saying that this new bailout/purchase of bad housing loans, etc. will be much less costly than the alternative of further collapse in the financial markets, and the spill over to other sectors.

Credit card companies are starting to reduce spending limits, which will lower consumer spending.

Banks are starting to close the doors on lending. I've already seen this impact a number of transacations I was working on this week.

While the main economic indicators have not yet been showing the US to be in an official recession, these new developments are going to shrink the economy and change those economic indicators, perhaps significantly, is my guess.

Because of pensions, retirement accounts and 401k's, the retirements of most people in the country are impacted by worthless financial stocks and a decreasing stock market. Note that investments in the financial sector has generally been considered safe and not risky like high tech stocks.

Note that the bailouts of individual companies has tended to result in shareholders losing most of their ownership or value (Bear Stearns and AIG)

The cost of the bailout won't be known for quite some time.  In fact, it is possible, though not likely, that the government is buying low on these securities and may be able to sell some for a profit later.  There is zero chance that these securities have no value.  The problem is no one knows the value so no one wants to set the market.  That is the role the government is taking.

Politically, this makes it very unlikely that the Bush tax cuts won't be repealed.  We are going back to the Clinton era tax rates.  We won't go back to pre Reagan tax rates.  Capital gains will most likely stay where they are or go up slightly.

The financial plans of both campaigns are severely affected.  McCain's permanent tax cuts are gone.  Obama will have to make a case for increasing the deficit to fund all his programs.