With all the brouhaha over the stimulus bill, a far more important plan is being formulated under most of the media's radar by the Obama administration that will radically alter the banking system in the country while perhaps staving off a depression.

The first $350 billion of the TARP program has done absolutely nothing to improve the economy as banks have hoarded the cash rather than even slightly freeing up credit that would help get the economy moving again.

The problem is that all those mortgage backed securities and credit derivatives that grew out of the housing boom have lost so much value no one knows what - if anything - they are worth. So the Treasury Department has hit upon a risky, radical idea that would take those assets off the hands of banks and in one fell swoop, put their balance sheets in the black.

That is just one of the ideas that Mr. Geithner has come up with to deal with the potential catastrophe that is staring us in the face; bank failures in the thousands that would very likely pull the economy into the depths of a depression.

The risk, many economists say, is enormous.

'Bad Bank': The prospects for the creation of a so-called "bad bank" have gone back and forth in recent days. A government-funded "bad bank" would buy toxic assets from bank balance sheets. But there are many hurdles.

For example, how much would the government pay for those assets -- pay too much, the taxpayer takes a hit; pay too little, and the banks do. Plus, many analysts believe that to be truly effective, a "bad bank" would need far more money than is available.

However, the Wall Street Journal reported Saturday that Treasury may use private sector money for the bulk of the financing. And speaking on "Fox News Sunday", Summers said Geithner believes he can bring "substantial private capital" to the plan.

The government would also have to purchase shares in the bank:

Many believed that the bad bank model would have required far more resources than presently available under the Troubled Asset Relief Program, or TARP.

In order for the bad bank plan to work successfully, the government would not only need to price and buy the bad paper, a difficult task in itself, but it would have to make large purchases of common stock to make up for the markdowns of the toxic paper on bank balance sheets.

This seems to be the major hurdle for newly installed Treasury Secretary Timothy Geithner and Senior Economic Adviser Larry Summers.

Buying so much stock also could trigger a de facto nationalization of the banks.

There is also a plan to insure a bank's assets:

Insuring assets: The Treasury Department has already done this for Citigroup and Bank of America. Here's how the Citi arrangement -- announced last fall - works, for example: Citi is on the hook for the first $29 billion in losses on the covered assets, which includes mostly loans backed by residential and commercial mortgages. Citi covers 10% of losses above that amount, with the government shouldering the rest.

In a bailout scheme announced last month, the United Kingdom used the same approach.

Such a plan helps ease the pain on banks, but will not force the banks to fully recognize the extent to which assets their holding have lost value -- an important step in the recovery process.

Or, the Administration may simply use the $350 billion to bail out banks on a case by case basis:

More bank injections: This idea isn't dead yet. Banks still need capital, and TARP fund still has some cash. Treasury may make more direct investments, though they would surely come with more strings attached, such as a requirement that banks boost lending, for example.

How about some really bitter medicine for the patient? Some debt/equity swaps:

Debt/equity swaps: Geithner could also require that debt holders in banks needing assistance "swap" their stake for stock. Existing shareholders would be wiped out and current creditors would give up some of their debt claims in exchange for ownership of the restructured firm. In addition to being fairer, swapping debt for equity would reduce the amount of debt weighing on the economy.

Now for the scary part; many economists don't believe that any of this will work, that somehow those toxic assets are going to have to be bought up and removed from the balance sheets of banks. The cost will be $3-4 trillion (some believe that it may be double that figure).

The point is, the banking crisis is far from over and may yet take us down unless something is done. One thing is for sure, that $350 billion in TARP money isn't enough. Eventually, Geithner is going to have to come before Congress and present a bill for saving the banks.

At that point, we may have no choice but to bite the bullet and mortgage the future in order to save it.