Because clearly housing prices are going to come down, and should come down, as they're historically much too high at this point.  If that's they're intent, then the bailout certainly won't work.

I'm also wondering if more and more Democrats will see the political risk of voting for this.

There are a huge number of home owners (err, mortgage holders) out there that felt pretty rich when their home values appeared to rise. Aside from re-financing, a lot of them started loading credit cards figuring they'd be richer tomorrow through the magic of home appreciation. As I understand it, this is part of the problem with some fraction of foreclosures, but I'm thinking there are still a lot of people deep in debt that will come due with a vengeance.

I have a neighbor who was having a great time this summer on his ski boat that he just bought last spring. It's now up for sale. Hmmm.

George Mobus, Associate Professor, Institute of Technology, University of Washington Tacoma, and Professional Student for Life

...Think 'bout it.

Massive consumerism = Massive environmental destruction

And massive consumerism is driven by a massive economy, 'specially one where people are encouraged to constantly buy more goods and dispose of the one they have.

And let's face it, even the strictest of environmental regulations can only make a dent when there are literally hundreds of millions of consumers who constantly want more and don't see the environment as a top priority compared to their personal fortunes and need for new toys.

I can't think of any other way that would have such a drastic impact on that trend in such a short amount of time as a financial disaster.

No more costly SUV's, no more costly McMansion developments, reduced air travel, reduced manufacturing, less international trade overall, less construction, less gasoline and energy demand.

And it all happens virtually overnight with no need for lengthy battles over new environmental regulations.

Though there are downsides (hear the chorus of "suspend the current environmental regulations during these tough economic times"), overall, a massive economic downturn might just be our saving grace.

It's pretty clear how we got here.  We borrowed and loaned as if there would never be another economic downturn.

We have just had a huge housing bubble.  People paid way too much for houses just as people paid way too much for tech stocks in the previous bubble.

Unlike the tech bubble people borrowed vast amounts of money to buy a house and moved in.  You couldn't exactly take up residence in a stock certificate.  You didn't find yourself on the street if your tech stock was "foreclosed".

And unlike the tech bubble people were left with huge bills to pay, bills that they assumed would become smaller bites out of their paychecks as inflation gave them a helping hand.

But we've had little inflation.  No help there.

And other (very foolish) people spent what equity they had.  They refinanced their houses or took out equity loans to pay off credit card bills or to buy short lifetime items.  

People also ran up large amounts of personal debt that ate up any money that they might have to used to make mortgage payments.

And other people got suckered into loans that they didn't understand.  They signed mortgages that were going to balloon way past their ability to service in a few years.

Mortgage providers turned a blind eye to what was happening.  They went for the short term return and ignored the basics.  A prudent banker would have called halt to new mortgages some time ago and started working on a plan to avoid foreclosures.  

You can't loan out $500k for a house, foreclose on it, re-sell it for $200k and stay in business.  Someone has to be looking out for the downside.

Major greed and fairly major lack of historical knowledge.  No great mystery as to why it happened.

Ultimate responsibility resides in the Federal Reserve, which has pursued a reckless course of loose monetary policy for many years.  To speak of "little inflation" ignores the fact that any inflation at all is a debasement of the dollar, and the cumulative effect of the Fed's political accommodation in recent years has been to impose a silent tax upon small savers and to award a silent subsidy to speculators -- speculators who, because of the effect of US tax policies, were able to place big bets with Other People's Money.  By encouraging conspicuous consumption and discouraging thrift, the Fed has not only rewarded profligate greed but has also notably contributed to our environmental degradation.

Enviros need to focus more on the Money Power, what it is, how it operates, and who operates it, because the Money Power is a major influence in determining Americans' economic behavior.

Resides with the people (mainly Republicans) who have fought to prevent regulation of financial markets.

Markets need to be free enough to allow innovation  and competition, but not so free that the most greedy among us are allowed to do as they wish.

It's a lesson that we have to relearn from time to time.