The question that we are all dying to hear the answer to is; what is the consequence of no bail-out?
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Absolutely spot-on!

Will interest rates rise? Yes.

Will housing and stock prices crash? Yes!

Will jobs be lost? Yes.

Will retirement funds experience extreme stress/insolvency? Yes.

Will we all be better for it well into the future (as opposed to what would happen if we continued to solve credit bubble problems with more credit bubbles)? Yes!

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All that being said, we do need to protect the money that really is there in FDIC-insured accounts and we should protect money market funds to some extent. As much as I hate to say it, we did need to protect the Fannie and Freddie bond holders because they are so entrenched in our financial system.

I also advocate a work program and deficit spending for R&D in energy, transportation and health care technologies.

Ultimately, we need a bailout, but Wall Street should not receive a single penny of our money.