Last week, I argued that the current $170 billion stimulus plan won't do much more than fill consumers' hearts with a sense of political love.

I know, criticism without suggestion isn't too enlightening. So rather than continue ranting about how silly this stimulus package seems, I thought I'd propose what I consider a more viable alternative for righting the economy.

To be sure, I've suggested in the past that a government bailout in any form may not be such a hot idea to begin with. Regardless, if the government is bent on intervening the economy, there has to be something somebody could do with that much money, right?  

That's a lot of zeroes, dude
Even Robin Leach's eyeballs bug out when you're talking about $170 billion. With that much money, you could buy the entire Coca-Cola (NYSE: KO) company, and still have enough left over to write a check for GM (NYSE: GM) and Ford (NYSE: F).

It's a lot of money, and I'm not any more experienced at 12-digit shopping sprees than the rest of us. Still, if you focus on the base of the problem, $170 billion could probably be used to attack some of the bigger issues plaguing the economy.

What's my proposal? Help the banks, and keep their equity here at home.

Banking on a rebound
One of the biggest threats facing our economy is the possibility of a permanent blow to our banking sector. As the excess gets sifted out, and the lax lending days come to an end, banks need to raise huge amounts of equity to patch up balance sheets and regain their machismo.

And have they ever. But ever since banking giants like Morgan Stanley (NYSE: MS), Merrill Lynch (NYSE: MER), and Bear Stearns (NYSE: BSC) got stung by credit writedowns, foreign investors have been their most common rescuers, infusing them with much-needed capital. While the foreign capital might be the saving grace for banks in the short run, down the road, such dependence on overseas funds could be the start of a bigger shift.

Who wins?
The more assets we sell to our friends abroad, the less autonomous our economy becomes. Don't get me wrong -- globalization is certainly the path towards the future, but when it comes at the cost of a decrease in domestic ownership of assets, the benefits get a bit fuzzy.

Financial services companies make up 18.4% of the S&P 500 Index, more than any other sector of our economy. When foreign investment firms own increasingly larger portions of American banks, more of the profits, dividends, and blood, sweat, and tears of our biggest industry gets mailed overseas, rather than recycled back into the U.S. economy.

Take Citigroup (NYSE: C), for example. The battered bank has already raised $14.5 billion in capital, most of which came from foreign investors, including the government of Singapore and the Kuwait Investment Authority. That much money amounts to selling a nearly 10% ownership stake in the giant bank.

If the money raised gets converted into common stock, and Citigroup returns its dividend to 2007 levels, you're talking about upwards of $1 billion per year getting sent abroad -- to say nothing of the 11% interest getting paid out in the meantime. Much of that was money that once stayed here at home.

Here's the kicker
$170 billion is not only the amount of the proposed stimulus plan, but also almost the same amount big banks have charged off their balance sheets thanks to soured loans. If we're truly adamant on spending that much money to stimulate our economy, a government bailout of the banking sector would provide lasting benefits, rather than the one-time punch of tax rebates.

If $170 billion were used for a bank bailout, banks could get back on their feet -- helping consumers and businesses grow -- and the profits of that sector would have a much better chance of staying in the country that produced them. Unlike tax rebates, keeping domestic ownership of assets up will prove just as beneficial 10 years from now as it will 10 months from now. Equity grows in value over time (or, at least should) and increases the wealth of those who own it; tax rebates will simply become a blip in our $14 trillion economy. Long term, the difference to our economy could be striking.

Alas, the stimulus package has been approved, and many of us eagerly await our checks. Our magnificent economy will come together and grow over time -- that certainly isn't a question. Who'll benefit most from that growth, however -- U.S citizens or investors abroad -- remains less certain.

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. He appreciates your questions, comments, and complaints. The Fool's disclosure policy is all about investors writing for investors.