My life consists of Radio Disney and Nick. I do not understand the bailout.

I heard the money will mostly go towards the mortgages. Does that mean someone that paid $600,000 on a house now only owes the $250,000 its worth now?

Some is going towards credit card debt. Does that mean those people will not owe that credit debt any longer?

I know these seem like stupid questions but I really am lost with this.

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Calling a illegal alien an "undocumented immigrant" is like calling a drug dealer an "unlicensed pharmacist."

You're not alone on this. I wish someone COULD help people understand this. By the way, it's 700 billion instead of 7 billion. To me, I can't even imagine it. Honestly, I wonder if this is the right thing to do. To me, it's sort of like putting a band-aid on an arm that's been cut off. Is Washington just helping these companies in short term and then what's going to happen next week when another company needs a bailout? What about us, the hardworking people? The government can't just keep printing $$$ to bail out these companies. I'm afraid we're looking at even worse times in the future. I certainly wouldn't want to be the next president.

I honestly don't understand it either.

They're not stupid questions.

I don't know the answers, but my understanding is now we will hold the mortgage notes, in the same way a back does in a traditional mortgage. I think there is some kind of component for people who currently have FHA mortgages, but I'm not sure what it is.

I haven't heard anything about credit card debt.

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm

What Paulson wants to do is take these "bad" mortages, and other possible other "bad" loans (credit card, car, and student loans) off the "books" of the banks. By doing that allows the banks to borrow more from the Federal Reserve at a cheap rate and loan out to customers. They are trying to free up credit by dumping the bad stuff on the taxpayer.

The first thing people need to understand is that the Federal Reserve does not have this much money. They just create/print it up as needed. Which is the defintion of inflation. You will start seeing the result of inflation in our food prices.
A lot of other countries right now are not going to "loan" us money, either buying T bills, or loans from other central banks. Germany, China and Japan are very cautious about taking anymore of our US dollars at this point.

Not sure this thread will answer your questions, but it did explain a lot to me...

http://www.mycoupons.com/boards/elec...-bail-out.html