Is it an Emergency (yet)? Economic Disaster Relief

There is exactly one simple way to 'get ahead of the curve' of this deflationary crash, for a quick recovery:
Give both Consumers and Businesses plenty of extra money to spend... by suspending all USA federal taxation immediately. No joke. That includes corporate income tax, individual income tax, estate and gift tax, and 'Social Security' tax. See my previous posts. It will work (yes, assuming The Wars are also ended).

But in case that is not done... National Emergency Acts.
Three other more ambitious actions may be called for if the current financial crisis deepens. Both aim to establish some humanity, calm predictability, and fiscal stimulus in the economy; they complement in the same spirit as the already-approved extension of unemployment aid.

1) a 'National Emergency Collective Bankruptcy' Act.
Rather than forcing millions of individuals and small businesses through the normal bankruptcy court proceedings which would overwhelm the system and drag on for years, define a set of uniform criteria that can be applied administratively and categorically (such as: for cases involving less than $100000 debt and at most one family home, set a fair interest rate, mandate that creditors accept interest-only payments for a given time period; and convert adjustable-rate loans to a specified low-interest fixed-term; etc). There is a good chance that this would be sufficient to enable the majority of persons and businesses now at-risk for catastrophic bankruptcy, to continue as productive economic citizens, to the benefit of creditors also.
[For an expert plan specific to mortgages, see: MortgageProfessor(Jack Guttentag/Igor Roitburg)

TIME:UniversalMortgageResetFix
]

2) a 'National Emergency Retirement' Act.
The large population group who are close to retirement age are particularly vulnerable at this point when unemployment is rampant and the value of their personal savings has been decimated by the investment market crash. With intense competition from younger workers for scarce jobs, the older ones are very unlikely to ever be able to find new employment to compensate, and many may be left destitute. As a solution, eliminate the current Social Security scheme of 'early retirement', and instead reduce the 'full retirement' age by 10 years (from 67 to 57) -- at least until the general investment market index values have recovered to their year 2000 peak adjusted for inflation (which could take another 10 years, based on prior national experiences). Persons still financially secure would opt to defer retirement until older. The Social Security Trust Funding is sufficient to cover this emergency, although it would hasten the generally accepted need to reform the system. An optional implementation would be to allow the 'early retirer' to choose some limited number of years to 'move forward' his reception of Social Security funds, allowing time for the remnant of his personal savings investments hopefully to recover and grow, at which point he could suspend the Social Security payments. An even simpler option: Allow a zero-interest loan advance up to $500 per month; after reaching the retirement age, the received payments would be deducted that same amount for the same number of months, thus repaying the loan.

3) a 'National Emergency Central Bank' Act.
We propose that a large part of what is now 'private banking' and also the semi-private 'Federal Reserve System' belong more safely in a true democratic National Central Bank, integrated with the US federal Treasury. Rather than donating trillions of dollars to large private banks of dubious competence/honesty...
The rationale is given in some of my other posts (see "'Too Big to Fail' ? NOT" and "What Is Money?").
To summarize:
(1) 'Money' is to be defined as a Service, exclusively provided by the Government.
(2) Most government funding is properly done by the simple act of 'Money-Creation'.
Some of this can be provided by the interest on loans made to the private sector by the Central National Bank; the rest, by direct federal spending of created money.
(3) Most forms of Taxation are therefore inefficient, unnecessary, and oppressive.
(4) Interest-paying U.S. Treasury Debt of all forms can and should be replaced with non-interest-bearing National Central Bank 'Certificates of Deposit'. Such deposits by any global users of U.S. Dollars will reduce/delay the need for Money-Creation.It will also encourage very large holders (like China) to allow their currency to float and to diversify into other currencies than US Dollar, which is a good thing for a safe/robust global economy (isn't China 'too big too fail'?).
(5) The private banking sector should be only small 'retail' banking services, and the FDIC limits be reduced accordingly (such as $10000 rather than 100000). The federal monopoly on 'no-risk' Certificates of Deposit ensures the feasibility of government funding, and demands that depositors to private banks knowingly bear the risk (presumably in return for receiving higher interest payments from those banks).

[see also:
E.Brown:SustainableBanking

Lewis&Einhorn:WhatWentWrong?

Cramer:BigBankFix