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"If we ever want to see a sustainable rally again, we need dramatic action," Jim Cramer told viewers of his "Mad Money" TV show Thursday.

He said that the systemic risks to the market have once again put the possibility of another Great Depression back on the table. "We are not done going down," he said.

Cramer unveiled his "tough love" plan for taking the risk out of the markets and restoring confidence in the U.S. economy. He called on President-elect Barack Obama not to wait until January to take action. "We need to act now," he said.

Here's his eight-point plan. First, Obama needs to hold a press conference and announce that the federal government will not allow any more big financial institutions to fail.

Second, we need to ensure the the safety of all life insurance and annuities. It may take another bailout or consolidation, but another AIG ( AIG) scare cannot happen.

Third, the government must stem house price depreciation by issuing tax credits for home purchases and by reinstalling the TARP plan with changes that don't penalize the banks for taking aid.

Fourth, the government must insure the bonds of both Fannie Mae ( FNM) and Freddie Mac ( FRE) to allow those institutions to continue their work.

Fifth, the government must step in to buy up and stabilize some of the collateralized debt obligations, or CDOs, to stabilize that market.

Sixth, the government must providing financing for any auto company that files for bankruptcy and provide no relief for those that don't. Some must be saved, but possibly not all three.

Cramer: Yahoo! a Play for Iron Stomachs

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