"Could a lawsuit be filed to prevent this bailout from happening? If the govt does something as stupid activity as this, how should the prudent people in this country react? "

It's up to our children to file.  You see, the money used by the government today will be paid back by the taxes our children and grandchildren and great grandchildren will pay.  Perhaps since they had no say in incurring this tax bill, they should file suit against the government for forcing them into indentured servitude.