Even given my strange perspective, there are some mornings I wake up in America and I feel that like Alice I am seeing the world through the looking glass. Today was one of those days.

According to the liberal New York Times: “Top federal regulators say they were taken aback when they learned that a California congresswoman who helped set up a meeting with bankers last year had family financial ties to a bank whose chief executive asked them for up to $50 million in special bailout funds. Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Waters’s husband, Sidney Williams, had served on the bank’s board until early last year and has owned at least $250,000 of its stock.”

I am shocked!

According to the almost as liberal NY Daily News: “President Obama said Thursday the nation's economic woes are not as dire as they seem and said his economic policies will get the country back on track. "I don't think things are ever as good as they say, or ever as bad as they say…Things two years ago were not as good as we thought because there were a lot of underlying weaknesses in the economy…They're not as bad as we think they are now…I don't like the idea of spending more government money, nor am I interested in expanding government's role”.

Oh, really?

Just 6 days ago according to the AP: “President Barack Obama challenged the nation Saturday to not just hang in there but rather to see the hard times as a chance to ‘discover great opportunity in the midst of great crisis.’”

$787-billion stimulus plan, $410 billion spending bill for the current fiscal year, proposed 2010 budget increases the deficit to about $1.8 trillion.

And then there is this from the Financial Times: “Jack Welch, who is regarded as the father of the “shareholder value” movement that has dominated the corporate world for more than 20 years, has said it was “a dumb idea” for executives to focus so heavily on quarterly profits and share price gains.  The former General Electric chief told the Financial Times the emphasis that executives and investors had put on shareholder value, which began gaining popularity after a speech he made in 1981, was misplaced.”

Mind boggling.

One day I left a saw out in my yard. A kid walking by, took the saw and used it to cut down my neighbor’s tree. I felt really bad that some dumb kid sawed down my neighbor’s nice tree, and even though I had left the saw out, there was nothing I, my neighbor, or even the kid could do to put the tree pieces back to make a living tree.

The economy will get better. It may be painful in the short-term, but much better for all long-term.

The housing bubble was just that and it burst. People were buying houses with money they did not have, knowing (hoping) that they would be able to sell the houses at a profit. Banks and financial institutions went along and leant the people money. When the merry-go-round stopped, everyone was thrown off.

But, DUH, housing prices are dropping and when prices drop, people buy more.

With all the “toxic” assets out there, banks stopped lending money. Short-term government loans/backing was needed to get the economy going again and there are signs it is beginning to stir.

Any part of any stimulus package that does not impact the economy within the next 12 months is not a stimulus - it is just government spending on a grand scale.

Doing nothing may not have been an option, but doing everything is just plan crazy.

Even forgetting about the inflationary impact of huge government borrowing, GenX, GenY and their children and grandchildren will pay the price, both financially and in their standard of living.

The panic of late last summer and early this year should not be allowed to cause the government to totally ruin the economic future of the nation (burn down the forest).

According to The Liberal New York Times (26 November 2008) the U.S. government’s financial assistance/economic stimulus/bailout was at least $7,800,000,000,000. Now that is $7.8 Trillion.

Several commentators have asked, “Where is all that money going to come from?” One even asked if the Federal Reserve was going to print it? Missing the point that the Federal Reserve does not print money, that is done by the Department of the Treasury’s Bureau of Engraving and Printing.

It is important to understand that the government is not spending all that money.

$3.1 trillion is being used by the government as an insurer for guarantees to investors and depositors (think FDIC). Now granted, in theory the $3.1 trillion is “at risk”, but it is very, very unlikely that it would be lost. In fact, much of the money is earning interest.

$3 trillion is available to the government to invest in commercial paper, banks, etc. Commercial paper is usually considered a safe investment and both the commercial paper and the capital investment in banks earns interest. Again, low risk with a potential for a return on the investment.

$1.78 trillion is for loans. These short term loans are backed by collateral. It is assumed most will be paid back. For those that are not paid back, the government can sell the collateral, but probably at a loss. The amount of the lost is unknown.

To paraphrase a quote attributed to Everett Dirksen: A trillion here, a trillion there, and pretty soon you're talking real money. But, it is important to remember that the U.S. government is not going out and buying flat panel televisions and trips to Cancun. In fact, so far it has only “spent” about $1.4 trillion.