Caught between a rock and a hard, crunchy credit crunch...

A number of people, who know I tend to have strong opinions politically, especially about financial and economic issues (I was an econ minor as an undergrad) have been asking me what I think of the proposed bailout/buyout. And I don't really have a good answer.

I'm leaning towards "necessary evil", as there does seem to be a lot of evidence suggesting that without some sort of assurance that money will eventually be repaid, nobody is willing to buy any form of debt. Without people willing to buy that debt - be it corporate bond issues or complex financial instruments that include things like home mortgages - the economy pretty much grinds to a halt. Businesses can't finance expansion, or normal operations, people can't buy houses, which means people can't sell houses, and eventually nobody can borrow. As much as people like to paint debt as evil - and it can be if used the wrong way - it also runs our economy, and is necessary to purchase pretty much any large item.

I don't like the idea of the government getting more heavily involved in the credit markets, and I don't like the idea of bailing out people who made poor choices, even if those choices seemed rational at the time. I also don't like the fact that whatever bailout bill is passed will have all kinds of stupid shit attached to it. And I especially don't like the talk of making sure any bailout bill includes help for poor, struggling homeowners who bought too much house, didn't read the fine print, and now can't pay their mortgage - I feel like people like myself - who have taken a hit in housing value, but are still paying their mortgage, are getting screwed for being responsible.

But at the same time, I don't like the idea of a massive collapse of the credit market, and I don't have any better thoughts on how to prevent it.