When Barack Obama is inaugurated, one of the first items on his legislative agenda will be an economic recovery package. By all accounts, the current economic crisis is one of the most complicated in American history, and fixing it will be no simple matter. We asked James K. Galbraith, the Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the University of Texas and author of The Predator State, for his suggestions on what to include in the package. Here's his response:

We need to start working on short-term projects just to stabilize the economy. Unemployment insurance is on everybody's list. The coverage right now is low, and a lot of people are going to need it. There are also simple things like revenue sharing--where the federal government writes checks to state and local governments. You want to keep libraries open, schools open, the parks open, the teachers on payroll. If you lay them off, they'll have more trouble paying their mortgages, and then the housing crisis will get worse.

The elderly population is taking a major hit to its wealth as a result of the stock market collapse, and that's another problem we can deal with quickly. I would suggest bumping Social Security benefits up 20 or 30 percent. You can't replace everyone's losses individually. But we should make sure that as elderly people lose their 401(k)s, they don't fall completely below the poverty line, and that the elderly as a whole don't lose their purchasing power.

Some short-term fixes don't work. Look at how the stimulus earlier this year--the tax rebates--played out. Checks were mailed in May, partly spent in June and July, and the economy was back in the tank in August. It wouldn't be sensible to use a lot of political capital just to have that happen again.

Looking further down the road, at grand strategy, renewable energy is what will be to the next generation what information tech was to the last one. Another long-term problem we have to fix is the physical stock of housing. There are millions of houses sitting on the market, and in increasing numbers, they will be abandoned, driving down the price of houses in the neighborhoods. I would start with a Home Owners Loan Corporation, modeled on the New Deal, that would get into the business of renegotiating terms and working to keep people in their homes. It's a complicated problem, but if you did it right, you might get it done in three years.

--As-told-to Amanda Silverman