* let Congress and the Senate show the American public that they can do important things FAST. Don't forget this an election year for many.
* calm the overseas markets
* stop a potential "bank run" where people pull all their assets out and convert to cash/gold/etc. I think that was why the FDIC limit was raised to $250K.

Will it work? Who knows? I think there is a potential that the government could make some money on the deal. For example - if you can buy billions of home loans for 50¢ on the dollar and a few years later (when the market has stablized) and re-sell them for 75¢ (or more), a lot of money could be made. Home loans are probably one of the better loans to make - no one wants to be forced out of their home. Car loans? Take it - I can ride the bus.