How does the bailout plan help the average working family who pays the mortgage ontime?

Answer 1

== Answer:== Consumer credit, credit cards, auto loans, mortgages, home equity lines of credit, etc. are funded by banks who make the loan then securitize and sell the debt in the Capital markets. If the capital markets freeze or in other words if the rest of the world and investors quit purchasing our debts as securities there will be no money to lend. This means when you go to the store and hand them your VISA Card with a credit limit of say $10,000 which has a current balance of $1,600 you should be able to purchase that new HDTV for $4,100 to watch football on but if capital markets freeze up there will be no money to fund the transaction. Even if you have been making all of your payments on time no money to lend means even if you pay your balance off monthly you will have no access to credit. This means we are back to a cash system and no one will be buying or selling homes, no one will be selling cars except for cash and you will in many cases be unable to even get your money from the bank because believe it or not your money is not sitting in the vault at your local bank. They probably lent it to a builder to build one of those homes which are not selling because they can't get financed. That is the short version. == Answer:== But the above only works if it works... If the bailout money gets sucked up by the corporate entities that created the problem the answer is "Oh well, can we get some more money to try it again?"