Let me add #4, which is really the most important one:
4. Because $700 billion is not large enough to make a difference. It will vaporize within weeks, if not days, and they will be back for more, but the next demand (and the one after that) will be even more urgent:
“Look how bad the markets are, they’re FROZEN!!!!! Hurry and give us another $3 trillion so we can stop the bleeding NOW. Clearly it’s worse than anyone could have expected as the disappearance of $700 billion shows us that the problem is HUGE and URGENT and it’s THE END OF THE WORLD AS WE KNOW IT!!!!”
Best to let the crack heads experience the withdrawl which will either kill them or make them healthier. No matter what, it needs to happen. The sooner we get this over with, the sooner we can create REAL jobs and get back to business. Until we reach bottom (either quickly via no bailout, or slowly via failed bailout after failed bailout — with longer periods of unemployment and declining wages/growth), we will not be able to turn the economy around.
