Generally I agree with your post, but consider this one statement:
Slowly contract the present money supply, then issue new money.
Contraction of the money supply would hurt the little guys more than the bit guys.
It would be better if we repudiated illegally contacted debt (as opposed to bailing out the debt holders with TARP funds) and then issued new currency.
I think it was $200 billion that just floated out of the first TARP into thin air. In a congressional hearing Rep. Kucinich asked Bernake where it went to and he wouldn't give a straight answer.