Obama's economic plan explained

President Obama's stimulus package got through the first vote in the House:

The vote was 244-188, with Republicans unanimous in opposition despite Obama's frequent pleas for bipartisan support.

I'm glad Obama is reaching out to Rs, but I'm also glad the GOP is standing their ground... even though their credibility was largely destroyed last fall when they supported Bush's Bailout. Nonetheless, there are a few Rs who are still credible as fiscal conservatives, such as John Shadegg, Jeff Flake and Ron Paul.

Anyway, I opposed the Bush Bailout and I oppose the Obama Stimulus Package.

But what is Obama's real plan?

ABCs Jake Tapper explains in this report on a meeting between Obama and House Rs:

the president said the stimulus is just one leg in a multi-legged stool to get economy going. Other legs include getting credit lines moving, cleaning out troubled assets, restoring confidence to lenders and dealing with the housing market more aggressively. The idea being that the stimulus bill is just the first step.

Can someone explain to me how Obama's policies on getting credit lines moving, cleaning out troubled assets, restoring confidence to lenders and dealing with the housing market are different from President Bush?

Oh wait! Obama is going to be more aggressive!

For instance, the WaPo reports that $700 billion wasn't enough. It seems Obama thinks that Bush was fiscally restrained when it came to his Billionaire Bankers' Bailout. Now Obama wants to up the ante!

Ahhh... anyone remember the Good Ole' Days when the $200 billion Fannie / Freddie bailout was going to fix everything?

This government interference was a catastrophe last fall and it continues to be a catastrophe. Propping up overpriced assets doesn't work. The malinvestment needs to be liquidated. No one wants to take the hit, but that'll be the quickest path to recovery. Liquidation, though painful, works.

Here's an anecdote that speaks volumes:

On Sunday I spoke with a friend of mine who lives in Phoenix, the heart of the mortgage meltdown. Last week he bought a house there. The house sold for $220,000 in April 2007.

How much did my buddy pay?

Just a tad over $60,000. Yup. He bought it off foreclosure. And I'm sure a bunch of people took hits on that - the former occupant, the mortgage lien holder, the city (when he challenges his property value), etc. But the bottom line is simple...

The malinvestment had to be liquidated.

Too bad we don't have people in Washington with the courage to speak the truth. As I said last fall, pain now or pain later. I say pain now.

Tim White