I am sure there are highly intellectual economists out there thinking about averting the global economic crisis, but it occurs to me that the problem can only be solved by attacking the root of the crisis - "housing sector caused the boom and triggered the burst of economy, eventually leading to the crisis". Economic stimulus to inject money for increased lending and spending by banks and consumers, respectively, seem to correct the symptoms of the problem.

 

In my opinion, the Toxic Asset Relief Program (or TARP) should be geared toward providing incentives to home-buyers looking out there for "value" deals. This has the advantage of injecting money to where the return is measurable, rather than let the institutions decide their own usage of the public funds.

 

This alone will not achieve the effect, it needs to be combined with Employment assurance (who would invest their savings in an uncertain economy?); I am not talking about contractual dates, but a stable, job-building economy, similar to the infrastructure spending the government is focusing on.

 

The final piece would be the tax-breaks (not rebates, but reduced tax withholding for future years) that will ease consumer spending.

 

This is a 3 piece formula - Incentive for home buyers, Job building Spending, Tax relief for increased spending - that could probably have the impact.