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We must all now come into terms with one of the biggest inconvenient truth of this decade. The Obama Bailout plans might not work. Though the Obama bailouts do seem like the only sensible move the government at the moment, it may not be so effective. Another most inconvenient truth we have to face right now is this: the last few decades of American wealth was not real.

For those of you who want to understand this situation much more clearly, imagine that debt is a vacuum or a bubble of air in the economic system. This is the perfect metaphor for debt. Debt is actually imaginary income. It is money you spend that is not yet there. Now, imagine that the economy is full of these bubbles. Soon, these bubbles accumulated into one great big bad debt that was near bursting.

Last year, the bubble burst. Suddenly, the market realized that it was supporting all this bad debt out of thin air. It first manifested in real estate where the biggest loan bubbles where being created. Both the banks and the real estate industry colluded to convince people to invest in houses. They kept building houses to sell to these people, convincing them that they could have those houses rented out to pay the mortgage. But then the value of the homes started dropping and that’s when everything started to get messy. The domino effect of these bad debt bubble burst was a recession so bad that no one could have possibly predicted just how bad it would turn out.

The problem is too big now; no amount of money could possibly plug up that big hole that was exposed once the debt crisis blew open. The administration is allotting billions of dollars into the Obama bailout plans, but it is definitely not enough to plug a hole worth trillions of dollars.

Obama bailouts should help to slow down the process. But for how long? Right now, analysts are afraid of another market crash caused by the bubble of accumulated credit card debt that is approaching the trillion dollar mark.

There is however, a ray of sunshine in all these foreboding forecast. Tuesday last week, President Obama accepted the loan payments from banks who were recipients of the Obama bailout plans. All in all, the repayment amount was more than sixty seven billion dollars. This was considered by all as a good omen. If anything, it proves that the banks that were once in danger was able to amass enough profit to pay back that sum.

However the president himself cautions everyone who might think that this is a sign that the economic problem is solved. Although this news is positive, the government further cautions that the market problems are far from over which lead to a dangerous worry free can posture that could exacerbate the problem.

Hopefully, these painful times we are experiencing right now are merely labor pains for the birth of a new, better economic system and spending attitude. The new economy should no longer rely heavily on the illusory wealth created by loans. If these hard times can teach us the great lessons we need to have learned a long time ago, then a great thing would be gained from this big mess.

President Barack Obama’s bailout plan is expected to create and even help save at least 2.5 million jobs related to the design, building, and maintenance of renewable energy projects.  These jobs include ironworking, window manufacturing, power distribution, and alternative energy as well.

These news jobs are also expected to prompt community colleges, power companies, and state energy offices to put up training programs to help both seasoned and new workers adjust well in to their new occupations.  More and more people believe that the obama bailout plan may very well be providing jobs to most of the people that have been aversely affected by the global recession.

There are, however, those who believe that the obama bailout plan may very well be causing an even greater problem, and this may very well be a problem that has no immediate solution.  The bigger problem is best explained by a look on a series of situations which could have a significant impact on the American economy.

The bailout plan, as proposed by US President Barack Obama, requires massive monetization of debt by the Federal Reserve, as well as huge new debt issues from the Treasury.  This situation in turn poses the question:  will the US dollar’s status as world reserve be threatened by this massive debt monetization?  Will this be further compounded by the multiyear mutitrillion dollar issuance of new treasuries?

These are pertinent questions because of the following reason: The United States has an economy that is primarily dependent on imports for sources of energy, shoes, clothing, and even advanced technological products.  Should the US dollar ever lose its current status as world reserve, the US will not be able to pay for the imports that sustains it, and this is undoubtedly a crises that is sure to be an even bigger problem than the current economic pinch.

President Obama has recently allayed fears regarding this issue by issuing a statement during a press conference, saying that the US dollar remains strong.  This is on the back of the belief of President Obama’s advisers that the US will have no problem monetizing debt and issue new debt endlessly, since the capital markets of the US are the deepest and most liquid in the world.

Experts, however, still maintain that the current direction of the Obama bailout plan may not be the way out of the crisis that the US is looking for.  Many believe that to avert the even bigger crisis that is looming in the background, the US must focus on saving the dollar’s status as the reserve currency.  This is seen as being done by reducing the US budget and trade deficits, a proposal that may not be the most welcome for the Obama administration.