I was disappointed that Obama was not able to answer the specific question on how the new 1 trillion dollar spending proposal would affect his proposed spending plans. On the other hand he correctly labels his proposed spending as investments for a very good reason.

Let me expand on his analogy of using a scalpel instead of a hatchet. His targeted spending proposals are like the difference between an amputation and an incision on an infected limb. Both of them are healing wounds, but the one results in a total loss of function and the other restores function to the limb.

I sincerely hope McCain's proposal of a spending freeze is more of a grandstand attempt than a real proposal. This is because a spending freeze by government is next to the last thing the US economy needs at this time. I should know, because it happened to me, as an entrepreneur, and I have seen it happen in more than one country which has run into trouble because of a balance of payments (BOP) deficit. The natural impulse to cut spending to the bone has to be resisted, because it deprives so many people and enterprises of vital liquidity, all at once! The patient goes cold turkey and dies of shock!

Admittedly, government spending is a major, often the major, cause of inflation in an economy. At the same time, government spending is also a vital part of the economy of any nation and the USA is no exception. A freeze of government spending (g) during a moment of fragility in any economy usually has the effect of bringing that economy to a grinding halt.

Let's leave the talk of surgery for now, and revert to my background as an entrepreneur and a double major in economics and management. The analogy I used on Newsvine (as Louis-341878) is easier to grasp:

Take the case of an investor taking over a run-down resort in the Caribbean. It still has a good brand and good credit, but is about to lose all that. (1) Key workers are insisting on exorbitant wages because he is unable to provide them with health benefits. (2) The Board of Health orders them to install a new refrigeration unit and get rid of infestations. (3) Raw materials are too expensive because he can't afford to buy in bulk. (4) The menu is severely devalued in and effort to attract a new clientele because he's losing his best customers. (5) Finally, the new staff he has hired is untrained and unprofessional.

So, our investor has just invested $1.2 M in buying out the original owner, but now he's in danger of losing his investment. What must he do? (Analogy inspired by September “ForbesLife" article: "Caribbean Comeback.")

Crazy as it sounds he has to spend even more! Get credit if he has to. I have just described in some detail the situation the new president is certain to face when he takes over the reins in January. Our country is losing billions of dollars every year because we have not developed our basic human resource raw material to its full potential. (Life is funny. Obama's mother spent years of her life working to develop micro-enterprise in the Philippines. No doubt, we are still importing some of the fruits of her labor to this day. This lowers our cost of living in the USA, but it also contributes to our trade imbalance. Now her son has to work to restore the balance, karma.)

At the same time we have to pay our workers too much because like the old resort owner we don't provide health insurance, and they have to pay for their training out of their own pockets. Our customer countries are patronizing our competitors, because of better and cheaper service. This is often unrecognized but is probably more costly in jobs than the jobs actually taken overseas by companies here.

Finally, we need to invest in some new plant, using new fuels, because the old oil burners are too expensive to operate, hence the need for alternative energy. I wonder how many people last night noticed Obama concede on the need for nuclear energy. He also failed to pick up on Boon Pickens' suggestion that natural gas might be a quicker, easier and more plentiful interim substitute for oil imports than new drilling. He will.

This extensive analogy serves to make one point. Our administration is like our new resort owner. He may have spent an obscene amount of money on taking control of the enterprise at hand. Now, he has absolutely NO CHOICE but to spend more money in order to make the business viable at all. Even if we've spent all we have to stabilize the vital signs of the economy, we now have to spend even more to deal directly with the root cause of the problem. The fundamentals of the economy are NOT sound.

The 700B we will spend will buy us a few years at most, but IF and ONLY IF, we make arrangements to look after the source of that money in the first place, the workers. Writing paper can rearrange who controls the fruit of the workers' labor, but it is no substitute for the actual output of fruit itself. Obama needs to explain the difference between consumption spending and investment. We are in trouble because we have neglected cultivation of the farm to lie, steal, wheel, and deal over its ownership.