Could someone PLEASE explain this to me?

What this "bailout" deal entails is the government buying securites from defaulted loans and investments of these mortgage giants such as AIG. By the government purchasing these securities the idea is essentially giving these companies a loan. The loan will give the financial companies enough cash to keep credit lines open for investors, like you and me. Once the economy has bounced back from this fallout, the government will sell back the securties to get as much money back as they possibly can. This economical move is to keep the economy essentially afloat and "nurse it back to health" so to speak. Theoretically, this is how it's suppose to work.