The commitment of US$700 billion did not impress markets here or around the world. Neither did fresh interest rate cuts. Stocks plunged yet again on Thursday.

The government still has some unused options, such as buying up foreclosed properties or making direct loans to homeowners, that might ease the credit and housing crises and brighten the economic outlook.

But the options are dwindling and generally involve partly taking over private companies, an idea that is anathema to economic conservatives and others in America.

Even as policymakers counsel patience in waiting for the medicine already prescribed to kick in fully, they are searching hard for other approaches.

“So long as financial conditions warrant, we will continue to look for ways to reduce funding pressures in key markets,” says Federal Reserve Chairman Ben Bernanke.

The primary tools of the Fed, the U.S. central bank, are lowering interest rates and flooding the system with money. It already has done plenty of both.

It could further lower interest rates, and probably will if the downturn continues. But after this week’s cut of one-half a percentage point, coordinated with other nations’ central banks, there is not a much lower for the U.S. economic team to go.

Since September 2007, the Federal Reserve has pushed its benchmark short-term rate down to 1.5 percent from 5.25 percent.

The Fed presided over by Alan Greenspan kept interest rates at 1 percent for a full year early in the decade, and many economists suggest that was one of the root causes of the housing bubble because it made it too easy for people to sign on to loans they could not afford.

Besides, in Japan holding rates near zero for years did little to help a deeply troubled economy.

The Fed could inject more money. Already, however, it has flooded the financial system with hundreds of billions of dollars.

Also, bold action by the central bank can have unintended consequences by signaling to investors that the situation may be worse than they thought, thereby contributing to the downward market spiral.

Apart from the Fed, Congress enacted a bailout package last week backed by up to US$700 billion in federal money, on top of a US$300 billion housing package passed during the summer. Treasury Secretary Henry Paulson says it will be weeks before the government starts using the bailout money to buy up soured mortgage-based securities.

The Treasury is now considering using some of the money to take part ownership in certain U.S. banks. That could put the government in the uncomfortable position of regulating banks in which it is an investor.

Many economists say that actions taken so far do little to deal with what is at the heart of the spreading financial contagion: falling housing prices and rising foreclosures.

Former White House economist Glenn Hubbard proposes that the government refinance every U.S. mortgage held by Fannie Mae and Freddie Mac, public-private mortgage giants, into 30-year loans fixed at 5.25 percent.

He also suggests that putting in place a cleanup agency modeled on the Resolution Trust Corp. of the late 1980s and early 1990s could help.

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