Eh? What's That?

A few days ago when the stock market was rallying the headlines indicated it was rallying in anticipation of the Stimulus Bill's passage and the Bailout Plan being revealed.

So how come today, when both actually occur, stocks are tanking? Even the headlines blame it on these events:
Stocks Tumble as Bailout Plan is unveiled (MSNBC).

At any rate, let me get this straight. Congress is looking to spend as much as $839 billion, and this bailout plan will cost $1 trillion? We're not talking about the same money, are we? Where is all this money coming from?! We're talking about a 10-20% increase in the national debt load here, folks!

According to this source, the total value of mortgages in the US is about $3.6 trillion. So we're already half-way to buying back every mortgage in America. In fact, as someone where I work was saying yesterday, why don't we do just that? Instead of all this crap they're proposing, why don't they pay off all the mortgages on primary residences?

Consider that. I'm currently paying about $800 per month on my mortgage. If I suddenly didn't have to pay that I would probably invest much of that and spend the rest on stuff. Both moves would stimulate the economy. Now multiply that by every mortgagee in America. That, folks, would be stimulus. Plus the banks would be able to close out the books on the bulk of their bad mortgages at the same time they'd see a massive influx of cash. That would free up credit.

Americans wouldn't have any mortgage interest to deduct on their taxes. Tax revenues would increase. Many people might just roll their current mortgage payment into buying up some of the depreciated and un-sellable houses currently on the market. That would stimulate demand on housing and raise property values again, further stimulating credit and the economy.

Yes, I'm sure I'm oversimplifying, and there would be other consequences (ie. banks also writing off good loans that would have earned the 100-150% returns over time, and perhaps inflation from the sudden supply of money when production is actually down), but I don't think it's any more lame-brained than what we're currently being force-fed. If we're going to put the country that far into debt, we may as well do something that increases the likelihood of getting back OUT of debt as soon as possible.

I don't see how my plan is any worse than what we're getting.