Terry with the greatest respect, the details of Obama's plan are on the table.

I agree entirely with your article but for this point.

Obama intends to attempt to remove the toxic mortgages from the Banks Balance sheets.

He is donating one trillion US taxpayers dollars to investors (Mostly to Hugo Rudd's evil neo-con Fundmanagers)in the hope they will buy those mortgages. He intends a lending ratio of $US6 (taxpayers) to every $US1 private equity. He is relying on the banks to value the toxic mortgages at ... get this for it is very significant, for all the wrong reasons but mostly because of the damage it would do to the US economy ... at $US0.30 in the dollar. He uses the logic that when the market recovers the value of the properties backing those mortgages will rise and the fundmanagers will make a killing.
He on his figures he estimates (Wrongly) the toxic debt held by banks is only about $US6 trillion. Think through the consequences IF the banks agree to write off 70% of the toxic mortgage debt or about $US4.5 trillion.

Obama might be godlike to some but he can't walk on water nor persuade bankers to give away assets that that may one day recover to a value and mean they won't lose.

It's all just 'blowhard' nonsense from Obama and cannot work. Once the market factors in the eventual ramifications it will collapse just as it did after realising stimulus packages don't work.

I don't understand where Obama is going with his comprehensive all-inclusive plans for the economy. Since I am not an economist in any sense of the word, I don't feel too bad about my lack of understanding because based on the article by the "brilliant" economist, Terry Miller and comments by Keith, Obama likewise is in the dark.

My problem is this: This mess has been underway for almost a decade; where have these brilliant economists been? Why couldn't they have had some influence in preventing the chaos that has developed? Furthermore, what is their solution now that the problem is severe? If they really have the answers, where are their powers of persuasion to set us on the right track?

Hi Joe,

Ibecame aware of the looming (still looming disaster three years ago after reading reports in the NY Times and Washington Post. Many commentators, both professional and, like myself and you, totally amateur were aware of what has come and what's still to come.

My solutions simple. John McCain and recently, Obama maintain the fundamentals of the US economy are still good. What they mean is that the industry and activity actually creating the wealth or creating the means to create wealth, and in the process providing most jobs, are still strong.
Industries reliant on consumerism, old technologies, methods and conditions will founder.

Let them. We've lived with the basic conditions of capitalism for a couple of hundred years ... it works.

Capitalism a la USA always coped with change.

Bank bailouts ... stuff them ... let them fail. The market will handle that. Other Banks and well run existing banks will replace them. The short term consequences will be terrible for everybody, with assets, but they will be nowhere near as dramatic or painfully drawn out as the consequences of propping up failing businesses artificially.

Just let things take their course. Stop Government meddling. They know bloody nothing. Stop the Federal Reserve meddling. Abolish it. It only looks out for the interests of it's member banks. Return the responsibility for printing money to Congress ... where it Constitutionally belongs. Re-instate the Glass-Stegall Act. Abolish the Community Re-inforcement act and re-jig the powers of the FDIC to comprehensively maintain regulation and oversee of the banking system.

Jobs will be lost but others will be created, over a relatively short period, and any adjustment won't take 20 years as it did following the Government meddling in 1929 and the 1930's.

Stimulus packages and infrastructure spending are peeing into the wind. They don't create wealth but merely send existing wealth spining through the economy. That's not what will get us out of this crisis. Actually creating wealth will.

Probably not comprehensive but I think you'll get my gist. Hope that helps

Regards Keith

In a modern monetary economy like the US (and Australia), sovereign - federal- government must spend before any net increase in financial assets can occur. Stimulus packages, especially infrastructure, are helpfull for replacing the demand that has become deficient in the private sector. I'm not crazy about the Obama plan though.

Government is an absolutely critical part of the process of stable, long-term wealth creation.

Obama is leading America into a socialist dictator ship. Ie so reminds very much of Ayn Rands novel Atlas Shrugged. The stimulus will not work and he will ask Americans to makes sacrifices like a good socialist always does. Life imitating art. Now days all economies have two steams - Trade and money .The stimulus will not work as the troubles have started in the Money economy and banks trying to recapitlise have denied the trade economy funds. Essentially if the US banks followed regulation which they are trying to avoid with mark to market accounting and revalued their assets to reflect their true market value which they have not done yet , if applied now all US banks including JP Morgan and other banks that look solid would actually be insolvent. The best course for capitalism and the one with the least moral hazard is to let the banks fail. It would be extremely painful now however as most junkies know the longer you leave it the harder it gets to recover when you do finally accept the cure. The looming problem with all these trillions floating around is they must be paid back to lenders( probably Japanese and Chinese) and whether they will keep lending to the US at the current rate is another problem. Given that we may get through this crisis and that we have a crisis in US banking every 10 years will the next 10 years be long enough time to recover for the next crisis and given the amount money governments have forked out for this one will there be anything left to go around next time?

Why hasn't Obama repealed the patriot act which allows the president to declare marshall law at a whim.Currently the US is far from being a democracy.Why is Obama bringing in compulsory military traning for all 18-25 yr olds? Is he preparing for war?