Assessing Obama's Economic Stimulus ! Can Washington bail out everyone? Can the Fed and Treasury fill every black hole?

At a time when the United States Senate is scheduled to pass Obama's stimulus plan and in an effort to build support for his signature economic stimulus plan, Mr. Obama is setting off for Indiana on Monday, holding his first prime-time news conference on Monday night and heading to Florida on Tuesday. In both states, he will be working to counter Republican criticism of his $800 billion recovery package and take greater control of the debate.

A number of leading financial experts and economists have come out in the open to dissect President Obama's economic stimulus package. Here is a summary of what Martin Weiss a leading financial expert and investor has forecasted:

"Washington will ultimately lose this epic battle." No matter what it does, it can't "patch back together the busted market for mortgages, derivatives and especially credit default swaps. It cannot stop a pandemic of loan losses among large AND small banks as the economy sinks and traditional bank lending goes bad. It cannot stop the contagion of falling confidence, fear and panic. It cannot outlaw gravity, stop investors from selling," or reverse decades of financial excess. That's Obama's dilemma, but so far he's failing to address it.

On February 1, Weiss added more warnings:

- Washington faces a "day of reckoning;" its plans to stop economic collapse won't work;

- ahead will be "a tidal wave of bankruptcies, despair, and even homelessness;" and

- America's resources are limited; its "credit lines will be severed;" its borrowing needs are exploding; the currency is being debased; buyers are increasingly worried; sovereign ones are slowing their purchases; last year, China dumped $26.1 billion in Fannie and Freddie bonds and ended all new investments in some US companies; "Japan, Russia, Western Europe, the Middle East, and Latin America (are) slowing down, stepping back, or even (selling) US investments."

Bottom line on what's ahead for the US economy in a nut shell:

- America's enormous borrowing needs come down to two choices - either pay future interest rates that will "kill the economy" or abandon bailout plans altogether;

- as a result, the economy, companies, perhaps whole industries, and markets will collapse; "the carnage will be traumatic and terrifying....if you thought 2008 was a nightmare, brace yourself" for what's coming - months "likely to be far more brutal than anything we've seen so far."

Unemployment will top 10%. Including discouraged and part-time workers "at least 16%." The 2009 federal deficit will balloon to "at least $2 trillion." Companies like the auto giants will go bankrupt or be downsized to a shadow of their former selves. Job losses will be enormous. The Dow is headed for 5500. A new, "more advanced" real estate collapse is coming. Home price declines and foreclosures are continuing. Personal bankruptcies will surge. Commercial real estate will plunge, and overall, "2009 will be the year of the Great Financial Dustbowl." It will be remembered as "the year in which America suffered a great money famine of epic proportions." In addition, spending and income will "take a massive hit."

To sum up what Martin Weiss is advocating is that, "the year 2009 will be the year of the Great Financial Dustbowl". Though I dont' agree in totality with what he has projected for the US economy but do share some of his reasoning.