People's expectations tend to generate proactive changes in their behavior that over time leads to a certain level of "group think" in a population. This simply means that if a large enough sample of the population starts becoming insecure either financially, or otherwise; this highly emotional response to outside stimuli can 'infect' the rest of the citizenry until everyone loses confidence across a spectrum of "concern points".
That is why it is ever so important for our governmental leaders to project confidence, and boldness in the face of an income crisis that is spiraling down a deflationary hole. Given the severe nature of this economic calamity that we are facing globally, it is imperative that we strike at the 'heart' of this economic 'monster' with not just adequate firepower but with everything we've got - we'll not be given another chance. This means that any fiscal stimulus package must be 10% or more of GDP since the multiplier effect that we'll get on the 'backside' of any stimulation will be much less given the negative psychology (lack of confidence) that is building across our world. This is not a 'run of the mill' recession but a structurally induced deflationary income crisis that is building downward momentum every week. We are in very dangerous territory!
What we must project to the world and the American people is not a fiscal stimulus plan that is adequate but one that will provide the requisite "shock and awe" across our global community. This means instituting$1.2 to 1.5 trillion fiscal stimuli that will create an entirely new industry with jobs that will not be temporary but permanent. It also means that we must address the root structural issues that brought our economy to its knees. Full employment must be guaranteed, and a global body comprised of labor and capital representatives must first set wage floors across all professions (among other imperatives) to stop businesses from continually reducing wages. Our economic system can function when 95% of workers who've contributed to a 35.2% increase in U.S. productivity from 1973 to 2007 generally are 'rewarded' with stagnant or declining wages. Income must get into the hands of those who will spend it and this must occur now not tomorrow.
Additionally, we must significantly reduce job insecurity (fear of losing one's job), and guarantee full employment for anyone wishing to work. This will go a long way towards instilling the much needed confidence that citizens must have before they will open up their wallets. Of course we must have something in our wallets first before we'll start spending again and it can't just be another credit card that will dig us a deeper debt hole from which we'll never be able to escape. For the Keynesian multiplier effect to work citizens must be willing to once again become consumers within their economies, otherwise we could throw $5 trillion dollars in fiscal stimulus at the income crisis deflationary spiral economic "monster" and he'd just bat it away like it was toy money.
First and foremost this means that any major fiscal stimulus program must be accompanied by an equally impressive marketing campaign that will instill pride, confidence, and create a generally felt belief that things will not only get better but on a grand scale. For this to be achievable we must also have one part of the fiscal stimulus that is not devoted to the prosaic but the exceptional. Something that will dramatically change our country, be visible by a large majority of citizens, and have an enduring impact on the quality of life for all citizens - possibly a cross country maglev 600 MPH train system built within the medians of our current expressway system. Don't forget we're all emotional creatures to one extent or another; therefore we'll need something that will be our touchstone of progress towards a better life for our children and us. People need to believe that their government can still deliver grand visions in order for them to believe that their current darkness will eventually recede.