Why is a bailout being considered, not massive loans?

Question/Comment: Why not loans, instead a “bailout”? Also, why do we have to do this in a week – why not two weeks? Did Paulson make it worse by saying it had to be done this week so that now everyone believes that it has to be done in this time frame, when maybe we could have used more time? So it comes back to your point of credibility — will we still believe if a deal doesn’t happen within a week?

Paul Solman: Practically speaking, the bail-out is loans: from the U.S. government. But they’re as good as money. When people say they’re holding “cash,” they generally mean U.S. government loans (bonds, bills and notes).

Meanwhile, yes, it all comes back to credibility. All the deal is something the world can believe in.