You may be left holding the bag

IT'S THE biggest government bailout package ever, some $700 billion to keep Wall Street and the American financial system afloat after a poorly regulated credit binge and a still-bursting housing bubble. Yet some four days after the massive federal intervention was proposed, only three things seem cast in stone.

1) Everybody hates it.

2) It's going to happen anyway.

3) You're going to pay for it, or at least certainly your children and their children will.

Public outrage spread yesterday as details of the Wall Street bailout package - in which the government would buy up billions of dollars of so-called "toxic debt" - leaked out. It was blasted by experts on the right ("It costs taxpayers money - don't do it," conservative tax fighter Grover Norquist told Politico.com) and on the left (said former Labor Secretary Robert Reich: "The public doesn't like a blank check.")

But what does it mean for you? Here are some questions and answers.

Q. How did we get into this mess?

A. The last generation has seen a steady deregulation of America's financial industry, especially after a 1999 law - sponsored by Phil Gramm, an ex-GOP senator and John McCain adviser, and signed by Democratic President Bill Clinton - removed traditional barriers between traditional banks, brokerage houses and insurance companies.

One of the results was a surge in the trading of "mortgage-backed securities" - complicated financial instruments that made buckets of money for Wall Street when the price of your house was going up 10 percent or 20 percent a year. But as home prices fall and mortgage foreclosures surge, these heavily leveraged bets are collapsing like a house of cards, threatening the global economic system.

Q. Where does the $700 billion figure come from?

A. It's kind of a wild guess - no one really knows how much these troubled assets, or so-called "toxic debt" that is held by America's remaining financial houses is really worth. And remember, this comes on top of the $29 billion bailout of Bear Stearns, the $85 billion to prop up world's largest insurer AIG, and as much as $200 billion to salvage quasi-public mortgage companies Fannie Mae and Freddie Mac.

Q. Wow, that's a lot of dough - where does it come from?

A. You!

Q. Me! That's not fair.