Lot's of the "debate" around the bill amounts to House members saying "it's not perfect, but we have to do something."
Of course the "something" is authorizing the Treasury to use federal funds to buy up billions of dollars of assets for which there is no known value and no market.
The goal, as I see it, is to clean up the balance sheets of firms who purposely took on liabilities which they did not have to report. No one will lend money to anyone else (among large financial institutions) because these mystery positions are unknown. The person you lend to today could declare a massive writedown tomorrow and go bankrupt, leaving you with the bag.
So, the plan goes, the United States will purchase these bad assets so that lenders will not be afraid of hidden toxic assets on borrower's balance sheets. Frozen credit markets will thaw.
Okay......not a bad idea. But, if the end goal is freeing up credit and not bailing out individual firms, another way to do this would be to legislate a requirement that these off-the-books over the counter transactions would have to be revealed. Then, lenders would know who was exposed and who was safe. Credit would flow to those worthy of it, and those who took (massive) risks would be responsible for their own fate.
What is the end goal of the bailout? Restore credit markets? Bailout individual firms (AIG but not Lehman)? Protect retirement money in the market?
What is the most narrowly tailored method available to achieve the goal?