Is It Worse to Free the Guilty or Punish the Innocent?

One economist I saw made a good point about the bailout bill. Nobody wants to see guilty parties go free, such as banks that made bad loans and homeowners that didn't pay their bills (well, maybe some Democrats aren't bothered by that, but most of us don't like it). However, if we oppose the bailout and the plan fails, millions of Americans who did nothing wrong and have dutifully paid their bills will be punished as they see the value of their investments plunge, including their biggest investment, their homes.

This is one of those difficult situations in which a few bad guys may have to be excused to keep from punishing millions of innocent people.

And, let's not forget, there is still the possibility that as the market stabilizes and some of the housing inventory is absorbed that the assets the government is buying will increase in value and return a profit to the Treasury when they're eventually sold. I wouldn't bet too much on the government doing anything at a profit, but who knows, it could happen.