Ron Paul had the right idea. It might not be the best sounding idea, but he was right. Let the recession happen. Sure it will suck for the better part of a year. But the economy would rebound much quicker. I believe he's right when he says that all we're doing right now is prolonging a recession.
We had a bank and housing crisis here in Sweden in the early 90's.
The government stepped in and took partial ownership of a few of the banks, saving thousands of mortgages.
A few years later the government sold off the bank shares without a loss.
And today, the Swedish banks aren't getting hurt as bad, because regulation was overlooked - although it is supposed to be replaced by an even more strict regulation.
So my point is that bailouts do work - if done right.
Just adding money into the system will most likely only prolong the inevitable.
Perhaps Ron Paul should look into how bailouts have worked in other countries.
Trying homecooked laissez-faire theories on US economy is beyond idiotic.