The US Financial Woes

I’ve been reading quite a bit about the financial crisis in the US lately. My initial reaction to the bail-out talks was echoed in a reddit post that I can’t find anymore: Why not bail-out the regular folks by giving them money to cover their defaulted mortgages and watch the results trickle up to the banks? Granted, probably a naive idea. But the author of this letter to Senator Obama has another alternative along the same lines: Ensure the FDIC is adequately funded to cover consumers then let the banks fail and rebuild the industry through bankruptcy courts and future legislation. Seems a much better plan than rushing to throw 700 billion at Wall Street with little to no oversight.