After getting rid of my excess adrenalin, now I'll do my best to post a serious, calm reply, as I see it, as tony asked for - non-political.
I'll reverse the question - instead of "why the bail-out?" and make it,
"what if we don't do the bailout?"
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The economy is like your home hot water system. Your diswasher and shower and washing machine and faucets all need hot water and the businesses in America (and the world) need hot water "(money, cash) to operate.
The banks are the hot water heater. They don't need hot water so much as they regulate the usage and flow - water comes in, water goes out, really doesn't matter but there needs to be some level water in the tank.
If the tank (banks) run out of money, the other appliances cease to function.
The banks are obliged by law to keep reserves for bad debts (let's call 'em "leaks"), it's actually a minimal amount but that's to assure water is kept in the tank.
Well, the tank is about empty and if not filled with the bailout, we're going to run out of money. Yes, the banks who made the bad loans and had CEO's stealing millions deserve it. But then all loans (including good ones) would be recalled by creditors in liquidation/foreclosure (which is ugly and costly in itself). Many of thet good creditworthy loans (perhaps you, if you've a mortgage or car loan) pay your payments, but can't readily come up with a total payoff.
If this happens in a domino style (ie: run on the bank), everything locks up and goes under. Nobody has any water for any purpose, not even the useful applicances. We make the "leaks" pay, but at the cost of the rest of the house.
Somehow, the economy has to be maintained...
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