Most experts look like fools now. Let’s remember this, as we go forward. Advice-taker, beware.

Bankruptcy of Policy Smarts
Speaking of bad advice, look to our political class.

Right away George W. Bush provided the “money” statement: He said we should solve the problem immediately, worry about its causes later.

You cannot solve a problem you do not understand.

The underlying cause? The house of cards the experts built was erected on the basis of federal policy. For decades, the federal government has been trying to “put people into houses” that they could not afford. It has been a multi-pronged effort. Hence the many prongs provoking our current pain.

That’s the nature of government activism: It is usually activated to fix previous government activism.

I am not the one to debate all the alleged “solutions.” But I know enough to be suspicious of most. Investor Jim Rogers’s statement — that America, with its multiple bailouts is already “more communist than China” — is worth thinking about.

Our leaders, of course, would sell us into socialist slavery in a blink, if it gets them re-elected. In fact, that appears to be exactly what they are doing.

The Looming Federal Bankruptcy
This is just the tip of a Titanic iceberg. The current crisis is nothing compared to the likely bankruptcy of the United States government itself.

Deficits soar. Neither major-party candidate plans to balance a budget in his first four years. The debt balloons. And now our politicians add multiple multi-billion-dollar bailouts onto this mess.

What happens when the government cannot maintain this debt? What happens when foreigners will not buy our bonds?

Meanwhile, journalists question political candidates as if the mortgage crisis and the attendant liquidity crisis were the worst thing we can imagine.

Much of the panic in Washington may (just perhaps) be based on the fear that the current market implosion will usher in the government’s own, much larger bankruptcy. And yet massive bailouts — piling debt upon debt — make the doom scenario not only more inevitable but also more imminent.

It would make more sense to kill cats.