“The Paulson plan is awful, it stinks and it’s nasty, but it’s also far better than anything else,” Jim Cramer told fans of his “Mad Money” TV show Tuesday. Cramer said the plan might not be that great, but it needs to pass in order for the U.S. to avoid another Great Depression. He explained the plan is meant to stop stop the 10,000 foreclosures a day that are hitting the housing market. The following are the top lies with the Paulson plan, according to Cramer.

• The plan doesn’t address the real problem of people losing their homes. Cramer said the plan is going to remove the bad loans from the banks balance sheets and that will stop the foreclosures.
• The plan costs too much. Cramer said the plan doesn’t cost a lot of money and it could even make money. He pointed out that the government will take an equity stake in companies that participate in the plan, which could end up being profitable for them .
• Critics are saying that executives of the failing firms will make too much money from the bailout. Cramer explained that this issue can be dealt with by creating executive compensation boards, or requiring executives to waive their salaries in order to participate in the plan.
• The government’s pricing of failed loans will force banks to take huge write-downs. Cramer said this argument is ridiculous because the banks have already written down the value of their loans.
• Some critics are saying that there’s no need to rush into a plan to solve this crisis. Cramer said “Rome is burning,” and if the plan doesn’t happen Washington Mutual (WM) could be lost.  Chat and share ideas with the best small cap traders LIVE each day free at Stocknetworkonline.com