...that I have absolutely no concept of what would happen if Congress didn't bail out Wall Street with the giant cash infusion they are currently debating. (Nor do I really understand where the $700 billion comes from or goes, or how it helps.) This is one of the downsides of being a grad student -- I really don't feel like I have the time or bandwidth to try reading enough to understand all this.
Slate said that the money for the $85 billion loan to AIG earlier this month came from the Federal Reserve selling off some of its securities reserve. Those reserves are now down to $200 billion, from $800 billion nine months ago. It seems to me - and I'm more than willing to be wrong on this one - that it's probably investors in other countries that are buying all those assets. Meanwhile, the Treasury is buying the bundles of high-risk mortgages that are at the epicenter of this mess, and for which they're never going to get payment. I'll just assume these losses will find their way into the national debt somehow.
Congress has been reluctant today to let such an expensive plan sail through. This is funny, since one of that body's specialties is signing half-trillion dollar blank checks.