It Makes Perfect Sense to Me

Problem: Low interest rates for the better part of this decade led to stratospheric debt levels for speculative purposes that led to the housing bubble and its nefarious after-shocks. 

Solution: The Fed lowers short-term rates to an all-time low and is maneuvering to lower long-term rates, such as mortgage rates.

Problem: Coupled with low rates, banks and other financial institutions recklessly abandoned time-proven credit underwriting standards, leading to mounds of toxic debt (the "T" in TARP was originally meant to be "toxic" before it was euphemisized (new word) to "troubled".)

Solution: Lend. But prudently, of course. 

Problem: We are in the mess we are in because government spent without regard, without means, and without brains. We must all understand that deficit spending was solely President Bush's fault. 

Solution: Fashion economic stimulus plans that elevate spending to multiples of what was cited as being the problem in the first place. Even drunken sailors are horrified.

Problem: Corporations and individuals did not behave responsibly. This cannot be repeated.

Solution: A bail-out bonanza. You should soon receive your monogrammed tin cup in the mail.

Problem: Oil prices are at criminally high levels. Anyone associated with the oil business must be captured and publicly quartered.

Solution: Prices under $40/barrel are a sign of the coming Great Deflation. We should all be afraid. The fact that you are now saving $50/month on gas purchases is an ominous omen.

Problem: Housing prices shot through the roof. 

Solution: We must prevent housing prices from falling.

Problem: American consumers do not save and they spend too much. Consumers spend their own money. Government also spends consumers' money.

Solution: Lament the depressed level of Christmas season spending; criticize the consumer for saving in times like this; proceed to send them a freshly-minted government check so that they will go out and spend. Spend even if it means you have to put it on a credit card and are worried that your employment status is precarious. Just spend! 

If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. Milton Friedman said that.