In extreme situations, we need extreme solutions.

This is the time for the USA government to act and provide comfort to the subprime borrowers who were led to believe that the economy will continue to perform and the property prices will go up - higher and higher. The government is responsible, at least partially, for this 'sinking'. It has to decide, design and deliver a special scheme for these sub prime borrowers. No other institution can intervene to provide lasting solution and succor.

Federal Reserve Bank can consider providing some regulatory relaxations to the banks by way of provisioning norms. This way, the banks will tolerate delayed payments from housing loan borrowers obviating the need for foreclosures.

The US government could chip in with bigger supports by announcing federally funded new projects specifically enabling eligible unemployed to participate.

Existing tax cuts should continue and new business initiatives should be actively supported with initial incentive seed margins and tax holidays from the government.

Employers could provide an option to the employees - to take a partial cut in salaries with an understanding to pay back the balance when the economy starts doing well.

Employees could consider enhancing their skills on a regular basis. This way they can easily handle unemployment. They will make themselves employable at all times. The security of their jobs should be in their hands and not in the hands of the employers or economy.

Facilitate the local manufacturers by levying an import tax on goods and commodities which can be produced within the country with a little more effort. Definitely the economic activity will go up. Well. WTO and other considerations will be a big picture. There should be a way out. This way, the local economy can be stimulated for growth.

There is yet another higher level consideration – USA is a free market enterprise. Then this suggestion goes against its basic beliefs and faiths. Well. Charity begins at home.

Curtail or better curb unproductive expenses. Austerity is a good measure in these times. If additionally, the Government could control wasteful expenditure that would make wonders easy.

For the time being, USA should be more concerned with domestic issues rather than global issues.

Promote saving. Well on this issue, there should be no doubt. The so called credit culture really has really affected and landed every one in big trouble In USA. This individual savings coupled with government investments have done wonders elsewhere. When the times are bad, probably one can with stand the bad days with one’s savings.

What is the local saving rate in USA. Is there any incentive for saving in USA. Well. Promote savings coupled with curbing or curtailing expenditure would do the magic. Let the Federal Reserve and the tax authorities provide double benefit for savers - higher interest for domestic savers and tax rebate for such savers.

Now USA needs simply FISCAL PRUDENCE repeat FISCAL PRUDENCE to get over its present plight.