One good thing about freely falling markets is that they make policy makers act quickly. The bad thing is that they are forced to act without thinking things through. By intervening in the markets, govt can limit the downside, but it will also limit the upside. This is going to be a very slow drawn out affair.
It will be interesting to see how big a hole the US Social Security and pension plans have at the end of this year. Equity markets have delivered 0% return in 10 years, when they are budgeted to deliver 8% return.