Jigman, I too was against the gov bailouts of the financial sector, and thought that the those big banks and investment firms deserved to crash. Until I saw a movie last night called "Too Big to Fail". Altho many details are left out, the movie did help me understand that the failure of those financial firms + AIG would probably have resulted in a catastrophic collapse of not only our, but possibly the global economy. As PapaPerch suggests, economies of foreign countries, particularly Europe, are so entwined with ours that the failure of one could chain react and take down the rest.
Maybe cuz its Hollywood, but the movie portrays our gov watchdogs Hank Paulson, Ben Bernanke, Tim Geitner et al, as heroes who gave their best efforts to craft damage control measures. Their last resort capital injection bailout was sound in principle - that Wall St. firms would use the bailout money to make loans to keep Main St. America businesses and jobs afloat. Most of us know that most of the bailout never got out of Wall St., squandered internally in salaries, bonuses, even lavish celebration parties at taxpayer expense, and our economy plunged into deep recession.