Bailout complaints
Although I have some complaints about the proposed bailout package, I'm starting to have more complaints about the media complaining about the bailout package. No one seems to bring up the point that the government is already on the hook for billions of dollars if banks go under (through the FDIC insurance program and similar programs for credit unions, etc). A quick google search didn't tell me the total exposure that the government has under the FDIC program but I could easily believe that letting the banks go under and then refunding people's money would cost more than keeping the banks from going under.
Plus, there's all kinds of other investments like money market funds that people expect to keep their value and the government would probably bail out if they started going under. Finally, with the bailout program the government is making an investment (though probably at a price above the current market price) so the final cost could be much smaller than the amount invested once the market stabilizes and the government might even make money. It's not at all clear that purchasing questionable debt from the banks will be more expensive in the end than letting them fail. Yet that doesn't get much (any?) discussion in the media.
Plus, there's all kinds of other investments like money market funds that people expect to keep their value and the government would probably bail out if they started going under. Finally, with the bailout program the government is making an investment (though probably at a price above the current market price) so the final cost could be much smaller than the amount invested once the market stabilizes and the government might even make money. It's not at all clear that purchasing questionable debt from the banks will be more expensive in the end than letting them fail. Yet that doesn't get much (any?) discussion in the media.