Is there tax relief for consumers? Can they deduct the interest they paid on the credit card debt they accumulated trying to stay afloat?

For instance -

If the government loses money, the financial industry will pay back the taxpayers.

...sounds nice, but was the entire financial industry responsible for this problem?  Or will the "good" companies have to pay more-than-their-share to cover the actions of the "bad" companies?

Guarantees taxpayers are repaid in full -- if other protections have not actually produced a profit

...doesn't exactly flesh out any details here.

1. NYT had a big article on AIG. According to that, if correct, AIG went under in significant degree because of the practices of one small office in London, of all places, which put them in the business of credit default swaps. A conceptual issue but not an AIG wide one perhaps. And the shareholders lost the whole mess for it.

I wonder if this suggests a flexible position rather than a cookie cutter in fact might work better, because the cause for various institutions might vary.

2. An article in what I think as I type was the Times which talked about what happened when the City of Philadelphia put in a mandatory mediation series into its foreclosure proceedings, in which some though probably not all loans were in fact reworked so that, if the compromise held, the foreclosure stopped and the homeowner stayed in the home. There was also a horrible article on Kos a day or so ago about what happened after the savings and load debacle wherein the writer, who lived in a coop in the Bronx argued that since the sole goal of the bailout there was for the bureaucrats to liquidate the ugly s and l portfolio, they were completely unwilling to work with the individual unit holders, no flexibility at all, since that was not the standard, only liquidation of bad loans. And a third on Kos as well about the poster's  own experience with add on fees which appear in foreclosure and bankruptcy proceedings which increase the debt, which fees are sometimes reviewed and chucked out in mediations and bankruptcy proceedings.

I understand why some posters are frustrated by providing 'onesie and twosie' resolutions for individual homeowners, but it is better than nothing and offers them a way to have their own  loans reworked through mediation or a change in the bankruptcy code allowing a bankruptcy judge to do it, without waiting for some policy based on regulation to filter down through this process, and keep those who are confronted with actual foreclosure from losing their homes while regulation writers dither. And to have the extra fees and other problems with their own loans looked at and dealt with, which may not be common to all loans. Some individuals have been able to recover and the flexibile individual proceedings allow them to do that for themselves. Some cannot be saved no matter what because they can't afford even the sensible version of a mortgage, through loss of job, medical bills, divorce or other personal tragedies which would equally have cost them their mortgages, subprime scandal or not. I'm not sure anything will help those who have alredy lost their homes in  completed foreclosures.

There may be something to the requirement being put in this initial enabling legislation requiring aggressive attempts to help homeowners in particular, since that sets the legislative goal of the program, rather than the RTC 'liquidate the portfolio any way you can where the liquidation itself and not the fate of the borrower is the goal' method.

Today's Newark Star Ledger has an article by Sam Ali entitled "Instruments of Finance - and Confusion",  in which the writer explains some of the causes the of this current financial crisis that really opened my eyes to what is happening.  Here is the link to the online version of the article: http://www.nj.com/news/ledger/index.ssf?/base/news-14/1222575934326640.xml&coll=1
Here are some relevant excerpts:

"...take collateralized mortgage obligations (CMOs)... banks take subprime loans and bundle them together. These loan bundles are then sliced, usually in six ... tranches that have been sorted and packaged by degree of risk. These... are then sold to various investment groups such as hedge funds, insurance companies and mutual funds.

The highest rated slice is typically AAA rated. The lowest possible tranch, known as the "equity" portion... is unrated and often referred to as "toxic waste," because it is so high-risk. In the past, investment banks kept these...on their own books.

But Wall Street ... [took] unrated equity slices from...different CMOs and pool them together to create a brand new security.

That pool ... was sliced into another six pieces and sorted by varying degrees of risk... into... a ...new security called a collateralized debt obligation or (CDO). The highest rated CDO would typically be stamped AAA, and the lowest was again referred to as the equity tranch and was unrated.

So now you an equity tranch of a CDO already made up of junky tranches of a subprime mortgage-backed security..."

The article goes on to explain credit default swaps (CDS), and the whole thing just sounds unbelievable.

If all this is true then what I want to know is, why should we taxpayers bailout these Wall Street frauds and crooks? How did the rating agencies fail to do due diligence by giving AAA ratings to junk and "toxic waste" because of fancy packaging?   How did the government fail to provide regulatory oversight to prevent such abuses?

Why is there no talk in this deal about bailing out the borrowers so those that can are able to stay in their homes and pay something, rather than being foreclosed out and exacerbating the problem? My Congressman, Rush Holt, is fighting for a HOLC solution as are Senator Clinton and a few others.  

If I'm going to pay to bail someone out, I'd rather it be borrowers, because keeping those people who can pay something in their homes by refinancing seems to be the way out, long term. Without this, I don't think Congress should approve any bailout deal that doesn't include this.

Perhaps the actual language of the bill will clarify but right now it looks like what it does is give Paulson a range of authorities (like requiring equity kickers in some transactions (like AIG?) and implementing the stupid Republican ex post facto insurance) subject to Congressional oversight.  The strong oversight and limitation of the initial line of credit are ok additions.