In case you somehow missed it, we just had another round of bailouts for the largest banks and insurance companies. Many question this decision. Why bail out these banks and insurance companies who made all the bad loans and investments in the first place, goes the argument. Let them fail. The scavengers will pick up what's left and we'll go from there.

Sounds easy enough, doesn't it? The problem is that last part. The part where we "go from there".

"There" may be a pretty bad place to try to start from. "There" might just be the end of life as we know it. "There" could be people like you and me begging in the streets for work, or a meal, or medicine for our kids.

These bailouts are our line in the sand against a general economic collapse. The loss of a major financial institution right now could precipitate such a collapse. Indeed our government believes it would.

The US Government has decided, right or wrong, that these institutions cannot fail. This is the line of defense. This is where we stand and fight. This is the "there" we will go from.

See, the reality is we have to pay for our past sins. It will be harsh medicine no matter what. By embracing the pain now we will accomplish two things:

1. We'll prevent the decline from becoming a crash
2. We'll stretch out the decline over a longer period of time

As and investor, you know both of those are very important. I'll leave it to you to decide which if either is critically important.