Why wasnt TARP bailout routed through a proviso that: Every 1st-mortgage in America would be paid for? The money still would end up in the banks, total disposable income would've EQUALLED the total TARP (minus 'slippage'), job losses avoided, demand UP, etc.... Not the political impossibilities-- would the arithmetic have worked?
Absolutely yes. The basic point here is that economic stimulus can be achieved via trickle down (pumping money and/or demand in at the top of the economic pyramid) or trickle up (pumping money and/or demand in at the bottom of the pyramid to the poor and working classes). The political power of rich versus poor, employers vs employees, capital vs labor usually determines the government's choice between trickle up or trickle down.