As I listened to The Great Leader explain our national predicament last night I heard two things.

First, we the people are in tremendous jeopardy, and face a financial collapse of a magnitude reminiscent of events that led to the Depression of the 1930's.

Second, the reason for this looming calamity is a loss of faith in one another by our financial institutions. Why? Because they rightly suspect the collateral their compatriots have accepted as security for what in that realm are termed “assets” but which we mere mortals think of as debts. They are suspect because most of them helped create the same bad paper too.

At the heart of the problem is the shocking realization that loans made to people who can't make the payments, loans in fact based on the belief that what goes up can't come down and debts will be serviced in an infinite chain of refinances, debt then passed from one to another, packaged, bundled and brokered are, in fact, are in fact bad debts.
Why? Because the borrowers can't make the payments. They just can't paper it over any longer. Like an elaborate game of Old Maid, the one who ends up holding the loan is the loser.

It doesn't take an MBA from the ivy halls to understand this?

So, before you can even say the “B” word, we're told we need to bailout the banks and investment houses that ran this Ponzi scheme because, in all honesty, we're already in the soup. Well who really needs the bailout then? Wall Street? Hell no, Main Street.

Rather than give a trillion dollars to the guys who already made millions off this, and are only looking to pull the rip chords on their golden parachutes and get out of Dodge, why don't we instead finance the folks on Main Street and turn them loose to go in and renegotiate their loans?

They're the ones we supposedly want to keep in their homes. They're the only ones who are going to keep the lawns mowed and the gutters clear. Why are we bailing out the ones who are going to use the money to foreclose and liquidate those homes? I hear WaMu could use some of the long green! Let's make a deal.

If we provide the liquidity at the bottom, presumably people will make the payments on these renegotiated loans and the fears amongst the bankers will recede. Trust will be restored. The financial system will stumble on, though humbled.
They need our cash. Well let's put the cash in the hands of every home owner so they can negotiate new mortgages. That will give them the hammer to cut a better deal. Put in the money and watch the market work.

And the people who really need their “moral hazard” indicators re-calibrated will get it. Let the big boys take their losses, and make the little guys debts more manageable. It will soon reflect in the economy. Think of it as "trickle up economics."

Funny that elite bunch of financial wizards in Washington didn't think of it, in as much as they're so worried about their problem becoming ours.

“It is impossible for a man to learn what he thinks he already knows.”
~ Epictetus