Once the government passed the $700 billion bailout for the financial sector, it was inevitable that virtually everyone else’s hand would soon be out asking for a piece of the near trillion-dollar giveaway. 

Municipal and state bond insurers, for example, now have their hands out, saying that they are as important to the financial health of the economy as any of the banks that the government is buying into. They are asking for up to $1.4 trillion in state and municipal bonds to be guaranteed, along with, perhaps, an additional $900 million in corporate and other debt they insure.

In a series of stutter-steps that have become the hallmark of the U.S. Treasury's approach to handling the subprime meltdown, the $700 billion bailout plan passed on October 3 was quickly revamped to emulate a British plan providing capital directly to banks.  This tactic harks back to the long-forgotten Reconstruction Finance Corporation of the early years of the Depression, in the waning days of the Hoover Administration.