I just read this blog post [1] by somebody who sounds like they know what they are talking about [2] and... well, the fundamentals of the original "bailout bill" do not sound as poisonous to libertarian ideology as I thought it would. In essence the bill was supposed to act like a giant "reset button" and doesn't actually bail anybody out. In fact, the institutions holding on to sub-prime mortgage securities will actually still take a (major) hit selling those securities to the US Treasury. The question, I guess, is how does the Treasury figure out what to pay for these crap loans?

The ultra-crapified version that is failing in the House right now is the one with all the contingencies attached to it -- the ability for judges to rewrite the terms of a loan so the mortgage payer can keep the house regardless of who gets stuck with the bill, government ownership of banks, caps on executive pay, etc. You know, socialism [3].