RAZZEL DAZZEL
The media is responsible for the razzel dazzling of the public and making it sound like the bailout is to aid the Fat Cats of Wallstreet. This is so far from reality.
The bailout is to help the Credit markets. Placing blame is a waste of time at this juncture. The focus is a path of resolving the issues in the credit markets.
A quick explanation of what occurred is this.
MR & MRS JONES purchase a home, get credit cards, and car loans. For whatever reason they stop making their payments. Which means the BANK that relies on the payments is not receiving them. Now that the bank does not get this money (a portion of the banks income) they FREEZE and are afraid to lend to others and CREDIT STOPS.
BUSINESSES need credit to stay functional. Example: A grocery store.
Banks lend millions to the grocery store to buy their products from suppliers. Banks also lend to the suppliers to allow them to produce the cereals they sell to the grocery stores. Without the CREDIT LINE the suppliers and the grocery stores stop functioning.
This is a very basic lesson, however, I hope through this you better understand that money MUST flow, that the financial markets MUST be liquid or everyone looses.