The New Year and the New Presidency Could Have Major Effects On the Economy

It was a dismal holiday for retailers.

Stores sales plunged as much as 8%, and online sales dropped for the first time since they've been recorded.

Now, we're waiting for the latest word on home sales.

A report due out tomorrow, last recorded a 17% drop in September.

President-Elect Barack Obama is in Hawaii working on an economic plan that includes an immediate Middle-Class tax cut.

"It's vital. People need money in their pockets to spend. That'll help get our economy going again." said Obama's Senior Advisor, David Axelrod.

The stimulus is expected to include federal help for state projects to create, or save 3,000,000 jobs -

At a cost of up to $775 billion dollars.

One nobel-prize winning economist worries that's too small.

"Even these enormous numbers we're hearing about are probably enough to mitigate, but by no means to reverse the slump we're headed into." said Nobel Laureate, Paul Krugman.

Republicans are willing to do something, but they're worried a cash handout to states won't help.

"Whatever we do, again, let's make sure that it's productive, it actually consists of things that need to be done, and actually move our economy ahead." said Senator, Bob Corker.

What started in housing may now be moving to commercial real estate.

As shopping slows, and stores close or struggle to stay open.

Malls are seeing more empty spaces.

Their stock is expected to close down 60% for the year.