This is a payout to the banks and hedge funds disguised as a giveaway to middle-class “homeowners”. What the banks and hedges want is to adjust the mortgages so that the victims can continue to pay — and they want the government to kick in the difference. The spin is that this benefits the “homeowners” when in reality it will just extend their misery. The only real beneficiaries are the banks and the hedges. Both political parties win — the dems are seen as being kind and caring and helping people in need and the repubs will get angry at the handout and rail about democratic waste and government interference in the free market. Both sides miss the real crime which is that the banks and hedges are getting rich off of your money. A poster earlier compared this scheme to 3-card monty, and that’s a good analogy. Everyone is watching the moving cups and missing what’s really happening. A quick look at Charles Schumer’s top donors will tell you who’s really behind this (I think DrChaos posted that either here or in another thread).

Someone earlier mentioned that there was no bailout when Enron went belly-up. That’s not entirely true — many pension funds held Enron stock and these funds are backed by the government PBGC, so when the pension funds get in trouble it’s your tax dollars that will bail them out. What you are witnessing is an unprecedented transfer of wealth from the poor and middle classes to a tiny group of super-wealthy people at the top. These stories about borrowers in trouble and bailouts to help them are all designed to hide the real truth from you.