The goal of this bailout isn’t to stabilize anything, it’s to transfer tax dollars to banks and hedge funds so that they’re not penalized for making and purchasing bad loans. See sdrealtor’s “golden rule”, above. And as far as having “enough money”, the US has an infinite amount of money — at least according to our Vice President. I’m sure many of our senators and representatives feel the same way…
As for what this portends for the housing market, I think you’re right, it will prolong the ridiculousness. We might even find ourselves in a similar situation to the Netherlands, where the housing bubble continues to grow with each additional government intervention and bailout. A lot of Japan’s financial troubles in the 90s were caused by government bailouts of banks that had made bad loans, if I remember correctly. Maybe something similar will happen here.
