Bad Behavior and the Economy

This week has been in interesting one for the US economy.  As I write this, the stock market continues to fall to levels we haven't seen in almost a decade.  This is despite the following events this past week:

• Passage of the $780B "stimulus" bill (I use that word in quotes because some of the pet projects in that thing are completely disgusting.  And for President Obama to even claim there are zero earmarks in this bill is a bold-faced lie.  I was disappointed when I heard him say this, especially given his remarks at the Democratic Retreat last month).
• Obama's announcement of his $75B foreclosure plan, which is aimed at helping people to pay their mortgages by lowering their costs or even forcing banks to lower the principal on the loan to the current value of the house.  I have issues with this plan as it does not discriminate between those people who were living within their means, doing everything right, and suddenly lost their job vs. those who chose to buy some McMansion and knew they couldn't afford it and are now getting help for it.  I am one of those responsible people with my money and my purchases, and now I have to foot the bill for some couple that chose status and image over what they could afford?  That's rewarding bad behavior IMO.
• Sketchy news out of Washington last week from the new Treasury Secretary Geitner on a convoluted and altogether horrendous plan to help banks.  I don't know why he was holding a press conference, but the lack of specific and details got investors more nervous.
• New economic numbers are out this week.  The CPI was up 0.3% for January, but it remained unchanged from January 2008, the first time that has happened in almost 50 years.  This is bad news and may be a sign of deflation taking hold in the economy.

All of these things are taking a toll on everyone's pocketbook.  But I am most worried about the government's response to this mess.  I do not believe in having my money security put into jeopardy because other people were not responsible.  I know that this might sound overly selfish, but the other extreme is even worse - no personal responsibility.  Where is accountability?  Where is the drive of Americans to fight through this by working at whatever job and cutting back expenses.

For those who point to FDR and the New Deal as the shining example of how quasi-Socialist policies cure a depression, I say this - prove it.  Prove that FDR solved the Depression.  The facts are against that premise - the Depression actually got worse by the late 1930s.  In my opinion, the threat and eventual declaring of war in WWII was what mobilized our economy to drive out the Depression and open into a new era of globalism.

We have a long way to go before we are a Socialist nation (despite some of the cries from the far right in this country who think any government involvement is Socialist).  But the latest steps taken by this administration are not helping silence those critics and are not having a profound endorsement from investors who continue to flee the marketplace.