Will Gov’t Intervention / Bailout Really Work?

According to an article (Gov’t Rushing to Finish Huge Financial Rescue Plan) in Yahoo! Financial News via the Associated Press…

The Bush administration sketched out a multi-faceted effort on Friday to confront the worst U.S.  Financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt. Relief washed over Wall Street with a surge of buying.

… Paulson gave few details but said he would work through the weekend with leaders of Congress from both parties to flesh out the program, the biggest proposed government intervention in financial markets since the Great Depression. Members of the Senate Banking Committee said they had yet to receive details of the proposal, but were ready to move quickly when they do. JEANNINE AVERSA and JULIE HIRSCHFELD DAVIS

So what I gather here is the Government is going to authorize the Fanny May and Freddie Mac to buy up properties that have foreclosed or in forecloser stabilize the banking / lending market. So essential they’re playing the game of buy low / sell high with tax payer dollars… that’s how it sounds to me but who
really is for certain because the Fed’s haven’t disclosed any details.

I have to agree with Senator McCain on this one:

The Republican presidential hopeful said the Fed should get back to “its core business of responsibly managing our money supply and inflation”…

McCain said simply that leaders should put aside partisan differences and “any action should be designed to keep people in their homes and safeguard the life savings of all Americans.” “McCain says Fed should stop government bailouts” By BETH FOUHY, Associated Press Writer.

I would think helping Americans stay in their homes with new financial terms so they pay their mortgages would be more lucrative? It stabilizes the financial market because people are paying their bills. And it doesn’t really cost tax payers anything unless the Fed’s want to make up the difference of what lenders
might lose in renegotiating financial terms.

Some conspiracy theorist friends of mine claim (my brother-in-law Tim) say this whole financial struggle and bailout is simply a ploy to make the notion of the “One World Currency” seem more attractive… or something like that..

So what do you think.. does it make sense to bailout the financial instutions or hardworking / tax-paying American’s?