Credit Default Swaps

So what we are going to do is buy $700 billion worth of credit default swaps.
My explanation of a credit default swap is; I bet you that Frank will place a $100 bet on a football game in October and maybe he won't honor his bet. Then I sell that bet on to someone else, who sells it on and sells it on.

Just to keep things in perspective, in 2006 our US taxpayer federal income tax receipts were $1.2 trillion. Bloomberg News reports that the now-worthless credit default swaps are/were worth $62 trillion. Pardon my skepticism, but how the heck would $700 billion put value back into $62 trillion?

So we are going to throw $700 billion at worthless items. A sure loss. Financial Times says no. We should follow the lead of Warren Buffet who bought $5 billion of warrants in Goldman-Sachs at 10% interest.
With this tactic we would add liquidity to the system, get something for our money, and not just provide welfare to corporations.
The corporate executives who invented Credit Default Swaps deserve to take a loss on them. I'm not buying them.