This talk about "credit crunch" is because the financial industry has been loaning (e.g., "selling") money to people and businesses who are lousy credit risks, and the sellers make money by getting the loans, packaging them, and then selling them again, but only for a "teeny-weeny" percentage higher to make a profit. This pyramid eventually runs out of buyers, so more pyramids have to be started again with new loan packages in order to keep revenue coming into the sellers.

What this bailout is trying to do is create that "super-buyer" at the top - in essence create one more level higher in the financial pyramids so that there is a buyer willing to be stuck with the junk and the financial industry folk continue to make a profit. That's the mortgage side of the "credit crunch" story - and why no one wants to talk "fixing the problem now" because that would end the crummy mortgage market.

For the businesses, many of them run cash-poor anyway and live off of borrowed money. The game is to get loans based on their accounts receivable so that they can pay today's bills with money due in tomorrow (or a lot later). The "cost of money" becomes part of their rate structure when selling product or services, and added to the end const that the customer for those products/services pays. Depending on the accounting practices, pay-back history, and solidity of the accounts receivable (in other words, will those business' customers really pay on time?) the credit-worthiness of the business is determined, which in turn determines the interest rate of these operating-fund loans, as well as any other terms and conditions to include when repayment is due. Many firms start off with a "short leash" on these type of loans and pay them off rather quickly, but as accounts receivable drag or costs rise (e.g., bonuses and executive salaries as an example), the loans also go up, and the firm stants accruing more debt than it can handle realistically under its accounts receivable. In reality, many of these businesses are already essentially bankrupt, and should go "Chapter 11" and reorganize and seek debt relief, but to do so puts their books before a bankrupcy judge and locks down executive pay and the ability to raid the assets.

Businesses have been doing this shell game financing for a very long time, but eventually everything catches up.

What the Bailout is trying to do is to make a "sugar daddy" out of the federal government so that companies with lousy credit basically have an after-market co-signer for their bad debts, and that co-signer is you and me via higher taxes. What a good deal! They get the money to pay off lousy management decisions and in-house thievery and we get the bill.

How many times has some deadbeat relative asked you to co-sign a loan or help bail them out of a stupid financial decision, and you know if you did you'd be stuck with the bill, they would escape scot-free, and they would get the benefit of the money while you got all the pain.

That's why it is so essential to "FIX" the problem first before releasing any money, or we are screwed even worse than the financial industry is trying to make us believe.

I don't believe in panic-buying anything, and when the elected watchdogs who have been lobbyist-supported forever tell me "hurry up and trust me," I put both hands over my wallet and start looking for my pistol.