What is Obama trying to gain

I think the biggest issue is his need to move on to the next problems before the current problems have been fixed.  He is talking about massive tax hikes on all income levels (ignoring the loaded term of 95% tax  returns).  Taxes (direct or indirect) are going up on energy, healthcare, income, capital gains, dividend, increase interest rates and almost everything else will act as a drag on the economy.

I don't think people would disagree with the need to raise taxes to address the debt that will be incurred over the 2007-2010 time period but raising taxes during what is likely the worst recession since the 30's isn't probably a winning formula right now.  I think the markets would be much more inclined for Obama to talk about not taking these steps until growth returns.  I think he feels the stimulus plan will do that - I have my doubts and that a year from now people will be calling for additional stimulus.

Given that GDP shrank by 6.2% last quarter and could be worse this quarter (January was an absolutely awful month) you will see over 10% contraction of the US economy over the last 6 months (add in that the stimulus package was half that) you should be scared.

I feel for my daughter given the amount f'n that is going with the economy right now. 

My point was simple that the spending we undertaken over the last year (along with other spending) that needs to be addressed.  It has to come somewhere outside of just printing money. 

I also beleive the government should be run like a household.  In good times you squirrel away money for bad times or pay down debt. When the country is booming, the government should increase its cut to pay down its debt (not spend which I know wouldn't really happen but one could hope) so that we aren't in the situation we are in right now appropriately organized trillion dollar stimulus or fund to buy bad assets would completely destroy the debt to GDP ratio.

i am definitely a starve the beast type person but inflation is going to be a big issue much sooner than anyone wants to face.

True.  But I think it is more a factor of the complete indecision and lack of a plan by DC.  If they set up a set of rules, even if they were ones that no one liked, and didn't change them daily depending on how the political winds were blowing, it would go a long way to building some confidence on Wall Street.  right now, the Geithner is letting plans slip out every week or so and seeing if the market likes his plan. 

Inaction right now is the worst thing the government can be doing and it is doing exactly that.  I wish the would get it over with and set up a bad bank and starting buying this crap - like the RTC. The government is the only person out there that can buy this stuff and sit on it and not worry about quarterly statements or mark-to-market. When the inpending inflation wave hits it can then sell these assets at minimal loss or even gains.  While I understand the talk of nationalization of bad banks, I think the unforeseen consequences in the CDS market would be too unpredictable to allow this to happen which is why it is never going to happen (much less the inability for the FDIC to take over banks aspects that don't fall with the auspices of FDIC overview - like asset management).