It's the economy. Stupid?

Alright, so I have a confession. I don't understand economics. I seem to have an actual, physical, allergy to it. Whenever people start to talk about it my brain tries to crawl out of my head through my ear. This is why I haven't written anything about it recently. But my 'wait and hope it goes away' approach seems to have failed so I asked a few people to dumb it down for me.

Apparently the mess started when the banks lent out more money than they actually had. It seems they can do this because they were lending out against the promise of other loans being paid back sooner or something like that. Then the housing bubble burst and the lending house of cards imploded.

This brings us to the bailout. Basically the problem is that the banks have no real value. The loans exist in some quantum state of both having a value and being worthless at the same time. So the government is stepping in by buying Schrodinger's loans. By buying these loans the government is giving banks real value and thus ensuring that they are not dead cats.

Personally I don't worry too much about where the government finds the money to pay for the 700 billion dollar bill. I expect it will be paid for by the same people who pay for everything else the government does for me, namely my children and their children. I would worry for them, but we have a long tradition of passing on bills like this and I expect them to do the same to their offspring.