Wondering Where We are Going...

From the Wall Street Journal

President-elect Barack Obama's economic team is considering an economic-stimulus program that will be far larger than the two-year, half-trillion-dollar plan under consideration two weeks ago, according to people familiar with the team's thinking.

ie They are talking a trillion!!! (A one with 12 zeros!!!!)
I found some blogposters (Rich) at CR to distill what that means:

The solution is to float the biggest possible stimulus package, pump it into stimulating production of goods and services, and simulataneously tank the dollar to make those goods and services very affordable to the world.

Conversely, you could tank the dollar first and then float the big stimulus package possible. The order makes no difference. I actually think they are tanking the dollar in advance of the stimulus.

The bagholders are all long-term debt holders and pensioners of dollar-denominated assets. Also, foreign exporters into the U.S. market.

The dollar will fall against all other major currencies. But beyond that, all major currencies will fall against the value of goods and services. It's called hyperinflation.

Apparently, this is how certain problems will be "solved". Social Security will be solved if the inflation adjustments lag with true inflation. It's not hard to imagine that happening! Too bad for the elderly who depend on the payments or those of us who would like to retire some day. Obviously, inflating the currency will also solve the problem of overpriced housing.
And where is the trillion going to come from? Already the US owes more than it can possibly pay back. The way to stay solvent in this scenario is to debase our currency against other world currencies, thereby making the debt cheaper, relative to goods. My thinking on a response to all this is very down to earth. It's time to start living like Uncle Jon and get good at gardening and have a lot of tools. Be able to produce something.

PS Slightly off topic but not really: I just finished reading "Mortgaging the Earth", a book on the World Bank. In that book we learn that Larry Summers, Obama's choice for head of the National Economic Council, in 1991, while serving as chief economist for the World Bank, authored a private memo arguing that the bank should actively encourage the dumping of toxic waste in developing countries, particularly "under populated countries in Africa," which Summers described as "UNDER-polluted."