Looks like Bank of <a href="America'>http://www.talkingpointsmemo.com/archives/2009/01/not_a_good_sign_1.php">America needs more money</a> to save Merril Lynch.  My guess is we will see many banks coming back for more money so that they can continue making bad investments and loaning money to people who have no prospect of repaying the loan.  I don't know the exact figure but I would guess that a large percentage of the typical consumers income is going to debt servicing, that is the money paid in interest late fees and overlimit fees, all the things that made credit card companies profitable for many years.  I dont get why no one is talking about the failure of our credit based economy.  The solution is not to give people more credit, that just creates a bigger hole down the road. 

A better sollution is to figure out a way to get people out of debt, perhaps make it easier and less stigmatizing to go bancrupt on credit cards, or start forgiving student loans; maybe even allow people to refininance their home at its current value and forgive the extra debt.  If people didn't have to spend so much of their income on debt service they might actually spend more money on consumer goods, which people keepsaying will jump start the economy.  The problem right now is that the economic plan seems to entail people getting easy credit so that they can buy more stuff and in a year or so we will be right back in the same place, just with a larger deficit.  If consumer debt was forgiven people might be able to get back to buying stuff but they would not be using borrowed money to do it, which might lead to a sustainable recovery.

The bailout should focus on the consumer and how to get the average borrower to a functional level. Obviously the people who borrowed more money than they could hope to repay are not without blame in this mess, but a bailout that encourages banks to keep giving them more money is crazy.