Bridging the Gap...rather, the Ocean

Yesterday PEObama (President Elect..) gave some details of the economic rescue plan he is going after. Even if the current economic crisis looks nothing like the Great Depression, Mr. Obama said, “This is a big problem, and it’s going to get worse.” (all extracts from the NYT article, Obama Warns of Further Economic Pain.) PEO is working hard to set low expectations. Hopefully he doesn't keep lowering them at every opportunity.
Some aspects of his plan:

• "The largest infrastructure program in roads and bridges and other traditional infrastructure since the building of the federal highway system in the 1950s." The Con(servative) group is asserting that public works do not create a lasting job impact, and that money used for these works are simply diverted from other areas. Clearly this does not wash, as the spending is 'incremental.'
• Auto industry bail-out
• Supports education, but details are yet to come
• Supports "strong set of financial regulations which banks, ratings agencies, mortgage brokers, a whole bunch of folks (will) start having to be much more accountable and behave much more responsibly."

PEO has been quiet on the issue of removing the tax breaks Bush showered on the 'wealthy.' From all appearances he is not going to touch the issue.

Between the government and the Fed, the printing presses can run 24/7, and PEO can give everyone in the country as many millions as he pleases. Since the gold 'peg' is noting but an 'oldie goldie' there is nothing to stop this scheme. The serious question comes in the form of imports and what 'currency' other nations will ask in return for giving us stuff.
The government's balance sheet itself, and its capacity to earn enough revenue to service its debt is a topic I will explore in the future. Clearly, selling off assets, as Bush has done, just to supplement current year's revenues, reduces this capacity. Adding unproductive assets, in the form of worthless warrants and equity of financial institutions, does not increase this 'capacity.'
Economists use 'GDP' and % of GDP for evaluating federal debt- no sane banker would use GDP based metrics to lend anyone money.
Fiduciary duties are very serious and highly taxing. Only those with a thoughtful mind and a sense of social purpose should engage in this noble task.