Firstly, the debate on capital hill on the US 800 Billion package is taking on emotion when this should be left out - example about capping executive packages and tax breaks for purchasing motor vehicle are uncalled for and not necessary to save America. If there was any wrongdoing by the banking executives then the law will be applied. In fact, they packaged a deal to save America's banks and paid less than 1 percent of the entire deal (350 B) should be made known. If the US President is unhappy about the Bankers rewarding themselves for doing their job in packaging a deal to save bank shareholders and the US people then this should be made clear during the negotiation process that this is pro-bono. It is not a solution now to claw back (if at all) the bonuses. As to the tax breaks - one simply fail to see why cars from those broken down manufacturers simply could not sale ( in good or bad times) so giving the purchaser a tax break will not solve the problem either is obvious.

Back to the main crisis - is to fix the confidence of the US public and the world at large. Lets look from the outside first - since 2001 nothing of much importance have been shown or championed by the US (as seen by outsiders)
- in fact I dare to say a lot of countries would love to see America go down the tube if not for its stranglehold on the world economy. In short, America will not see much help from other countries save for if it some how will benefit them. America has no real friends and many wannabes and even more enemies. So perhaps some of the 800 Billion would be better spend making some friends like say building parts of Gaza or delivering medicine to North Korea ( to do what is most unlikely to throw your enemy around). These are positive issues to gain friends. Instead what I am seeing is an inward looking America first.

Now to America itself. First the on-going mortgage crisis is still burning and hence a solution is critical. There are two issues here which have been buried in the emotions - firstly those who really need a home and those who need a house as an investment. The lenders did not discriminate them and in fact lumped all of them together as means to diversify the risks before repacking and selling to another. Save those who needs a roof over their head - but how ? Give them preferential lending to setoff the increase in costs - in most cases these people have been given low rates for 5 years and then high rates for the next 25 so finance those gaps ( which could be as high as 12%) with low rates and extend the loan by another 10 years . This effectively will bring the affordability closer to save at least 65 % of those who need a roof over their heads. What about those holding the investment ? Well, I predict if you can save the first lot, confidence will return to lend to the second lots as well - with some risk. You can do the maths here.

More importantly this will not have zeroised the value of the 'toxic' (again emotional word) mortgage in the short term. Important to understand something about mark to market valuation here which is another issue and how rating agencies work (both of these to be tackled later as this is more deeper than I could explained here).

In reality the above will only affect less than 3-5 % of the entire US population but the effect could be felt throughout the world simply because people are pessimistic about the future. Therefore the next issue is about the future – again two issues – firms that want to downsize have to do this by first offering a salary cut or less working days or retraining for their workers as an alternative. They could also access funds (from govt) if retraining is opted for by the workers. In short the same funds could be channeled back to Universities/Colleges as fees. I failed to see the need to build more roads/buildings etc as that is exactly the things to avoid as America must refocus on its role in the world which is to sustainably use its resources and simply big is so yesterday. I know it is a bad time to talk about restraining carbon emission but this is exactly where the funds should be going to by finding technology if not greater efforts to conserve for future Americans. Whether one like it or not the current Americans have already spend beyond the 3th generations’ future and this simply cannot be sustained.