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Web Letter

Mr. Henry is right. Obama's stimulus is a dog's breakfast of spending proposals that largely misses those in greatest need.

Where Mr. Henry and almost ever other economist goes wrong is thinking that we can stimulate a broken economic model while a $50 trillion, twenty-five-year debt bubble is bursting.

Our economic model, 70 percent consumption based on ever-expanding debt and trade deficits, is broken beyond repair. The $50 trillion in aggregate debt of the US is unservicable. At least $20 trillion and probably more will have to be written off, and all those debts are someone's else's assets.

There is no going back. Consumers are done with the wild overspending enabled by cheap and abundant credit. The debt must be recognized, the banks nationalized and the economy rationalized. All else is a fool's errand that will prolong and deepen the crisis and the pain, but indeed that is exactly where we are headed.

Web Letter

Excellent article. I'm going to spoil the ending of your series by releasing the following plan. This plan will inject $150 billion per year, ten times the amount Obama proposes, into the green economy, creating 25 million net jobs over the next three-to-five years, and reducing annual government deficits by $100 billion.

1. Double the gas tax and generate an additional $38 billion per year in federal revenue. The price of gas at the pump has dropped $1 per gallon over the last few months, and it appears it will continue to decline; consumers will not notice a 17.4 cent additional tax. Thirty billion dollars for green and $8 billion toward budget reduction.

2. End the wars in Iraq and Afghanistan. American taxpayers spent $188 billion in 2008 on two needless and unpopular wars. A hundred billion dollars to green and $88 billion to budget reduction. Give all veterans free green job training, to avoid repeating the mistake of Vietnam and flooding our streets and prisons with homeless vets.

3. Cut the prison population in half. As one of the impacts of outsourcing manufacturing jobs, the prison population has nearly doubled during the Bush administration. The nation spends $49 billion per year to house and feed 2.3 million of our fellow citizens, up 76 percent from 1.3 million in 2000. Provide green job training in prisons, and as a diversion program for nonviolent offenders, giving graduates the opportunity to work for the state installing a green infrastructure. Twenty billion dollars per year for green and $4 billion in debt reduction.

Combined, this plan will generate $150 billion per year towards green jobs, and reduce budget deficits by $100 billion. Economist Robert Pollin, writing in The Nation, estimates that eighteen jobs are produced for every $1 million invested in green infrastructure. On the other hand, the military and oil industries produce only 7.5 jobs for every $1 million spent.

Unfortunately, this plan will not happen, the federal government is too corrupt. That is why, later in your series, I will introduce a plan that takes the money and power away from Washington and gives it back to the people.