I don’t know. My understanding is that the problem is people/banks are hording cash. Banks, specially the big ones, are afraid to lend to each other and and to companies. With out credit, the economic engine will seize. I’ve read that knowledgeable people don’t know for certain that no bailout means massive depression, nor that a bailout will work for sure, but are you willing to take that
Word is that Dems have extracted concessions like equity in the firms bailed out. According to this blog entry http://tnr.com/politics/story.html?id=4b44697a-2b2c-4cf5-aaae-39097e9c6d96, The administration had acceded to Democratic demands that the government get shares in the firms it rescues, oversight mechanisms, and limiting what the financial titans who got us into this mess could pocket from this rescue. Maybe not as good a deal as Buffet got at Goldman, but not horrible either.
I read elsewhere that Obama is angering the Liberal base by wanting to exclude bankruptcy protection from the bailout.
So maybe, congress can pass something that lessens the risk of financial collapse for all of us without enriching the greedy bankers and saddle us with debt.
