Will the bailout help out the economy (e.g. improve employment) or just stop us from completely crashing?

engcomp answered one year ago …

The stated objective of the $700B rescue plan is to provide liquidity to the market and keeping industry and the economy going. This is a smokescreen under which the big banks want to offload their junk assets onto the taxpayer.

Here is a suggestion: Instead of giving the $700B to Morgan Stanley and Goldman Sachs, where the money will disappear into a block hole (remember, MS is leveraged 33:1 and GS is leveraged 26:1), give it to the hundreds of solvent small banks that are leveraged 11:1 or less. Don't you think this has a better chance of meeting the stated objective?

But then, the hidden objective of bailing out MS and GS cannot be met. So what if they go Lehman's way? $700B in the right hands can work miracles.