Each post that we wrote this week highlights a different problem that is holding back this country’s housing market: low rates aren’t enough, today’s mortgage market is mostly made up of the haves and the have nots, lowering home prices won’t create a more stable market and yesterday’s post discussed how the American dream of homeownership doesn’t have to turn into a nightmare. Each one of those posts identified something different that’s going wrong with housing.

But what good is identifying a problem if you can’t think of a way to fix it?

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The Senate approved their version of the stimulus bill this afternoon, sending the over-$800 billion plan to a series of negotiations before it can be signed into law.

To give you a better understanding of what the final legislation may look like, let’s break down the similarities and differences between the House and the Senate’s version (with a little help from CNNMoney’s Jeanne Sahadi).

Republican Support: While the House’s version received not one GOP vote, the Senate’s draft was supported by three Republicans (Susan Collins and Olympia J. Snowe of Maine, and Arlen Specter of Pennsylvania).

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In reaction to the president’s announcement yesterday regarding executive-salary restrictions, we posted a piece that asked the simple, yet largely ignored question: “Can Congress Limit Executive Salaries?”

While yesterday’s announcement has brought many questions and issues to the table — here’s another one to consider: “will compensation restrictions drive away talented executives to firms unregulated by government control?”

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In what the Wall Street Journal describes as “an early test of Democratic loyalty to the president-elect,” lawmakers voted in favor of releasing the second-half of the TARP funds to the upcoming administration. While the vote was expected, but not guaranteed, how can taxpayers expect that this $350 billion will be spent more efficiently and effectively than the first? The short answer is we can’t; but the new administration has promised to do some things differently.

Click here to view the latest list of participants in the bank-share purchase program.

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Federal Reserve Chairman Ben Bernanke delivered a speech today at the London School of Economics on “The Crisis and the Policy Response.” Mr. Bernanke argued that the president elect’s stimulus package alone would not be enough to facilitate an economic recovery.

“In my view, however, fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system.  History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively,” said Bernanke.

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The United States’ next major spending package is nearly fully formulated, expected to total somewhere in the range of $700 billion – $1 trillion. In what has been deemed the “American Recovery and Reinvestment Plan,” the latest stimulus package has been designed around infrastructure repairs, unemployment relief, state budget recovery, and most recently a large tax-cut initiative designed to garner Republican support. According to the Wall Street Journal, a $300 billion tax-cut program will be aimed at both individuals and businesses:

Republicans and business leaders hadn’t seen specifics of the proposals Sunday night, but welcomed the idea of basing a bigger proportion of the stimulus plan on tax cuts. Their response suggests the legislation could attract relatively broad support, and it highlighted the Obama team’s determination to win backing from varied interests.

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President-elect Barack Obama and his economic team have been crafting an expansive — and costly — economic- stimulus package for Congress that is slated to be his first major act as President. According to the Wall Street Journal, Obama’s transition team gauges the price tag of the stimulus package to be between $675 billion and $775 billion over two years. Other claims report the program could reach $850 billion. But fear not, insiders have assured the Journal they are doing their best to keep the stimulus under $1 trillion (for “that could carry political consequences”).

In defense of the possible price tag: Read the rest of this entry »

On the heels of his pick for Treasury Secretary, president-elect Obama is set to introduce key members of his Cabinet picks on Monday, according to the NY Times:

On Monday, Mr. Obama plans to introduce his economic team, starting with his Treasury secretary, Timothy F. Geithner. News that Mr. Geithner, the president of the Federal Reserve Bank of New York, would get the job helped send the stock market up by nearly 500 points on Friday after days of sharp losses.

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