There has been much discussion of the bailout with most people being against it. Whether or not the bill was passed the economy will slow and recede. Either way, we are headed toward a rough economy in the future. However, passing the bill is (was) akin to giving a heroin addict methodone. It was not a stopgap measure, it is something to only soften the blow.
If our credit market grinds to a halt, there will be no money loaned to start businesses or buy cars and houses. Already I hear of rumors (and that is all they are as far I’ve seen) that unless you have a credit score of 700, you cannot get a loan for a car.
But that is the tip of the iceberg. If the credit market continues to tighten up and the economy continues to slow, our national debt (debt held by our countried because they perceive it have value in the long run) will be “cashed in” by other countries because it will be perceived not to have value. Whether or not it really does have value doesn’t matter (I believe it does, for what its worth) — it is all in the perception. The bailout was designed to enforce the perception that our economy is fundamentally sound to the world. Again, I believe it is. And again, it is all in perception.
If the international market comes calling for the debt to be repaid, that is when mayhem and gnashing of teeth ensues. The bailout was meant to stop this part of the economy going bad. Our economy will go into more of a recession either way.
So, to recap — with or without a “bailout” or “stabilization” as some have more aptly called it, we will still have a recession. Without a bailout, though, there is a much higher chance of things getting much worse when the international markets (those who hold our debt) come calling.