The double entendre title is a good precis of the future. The rubbish you hear from business channels, sundry academic economists and hacks of the Bush and Obama administration, who are the culprit partners in crime of the debacle, is based on a skewed interpretation of Keynesian economic prescriptions after the great depression. Explained simply, he said that the government should be generally fiscally prudent with balanced budgets and invest in infrastructure and education. During adverse circumstances like recessions, the government should spend and run budget deficits to prevent the recession from spiraling into a deflationary depression. The decreased spending by consumers and business must be countered to forestall a vicious cycle where decreased consumption and business investment feed on each other. Keynes not emphasized first part of the prescription is a necessary precondition for his drastic deficit prescription. Mises Austrian School of Economics disagrees with Keynes and compares the increased debt remedy equivalent to treating an alcoholic's withdrawal symptoms with more liquor.

The current problem with the Western world is that the US has a huge debt and unfunded liabilities of 60+ trillion dollars. It has an overvalued currency and has lost its manufacturing base. It cannot even meet its own needs for toys, textiles, household appliances, automobiles or most of life's basic necessities. Thus we have a basically broke government printing or borrowing money to keep further deterioration in the job market. Any increased spending by the consumer would worsen the trade deficit. Unfortunately China, Japan and the oil exporting countries are unwilling to finance the trade deficit and desperately trying to get rid of their dollars and treasury securities. That is why the dollar and treasuries nosedived on Friday and gold, oil and commodities rose.

The additional problems are that consumers comprise 70% of the US economy. They are heavily indebted with credit card, auto loan and student loan debts. This is why Obama tried to reduce the burden of servicing that debt by preventing card companies from raising interest rates retroactively and without reason. Since he won elections with their donations, he paid the piper by making the bill effective only after a period of nine months to allow the companies to lock in higher rates for new and old credit cards. Consumers are worried about their debt and their jobs. They have lost nearly 40% of their 401Ks and will lose their pension benefits in bankruptcies like Chrysler and GM. Adding fuel to the fire is that until recently most people have been using their home equity lines of credit like an ATM card and now owe more on their mortgage than their homes are worth. So any tax rebates that people receive from the Bush and Obama stimulus are being used in repaying debt rather than spending.

The lost jobs and corporate income tax revenue is leading to insolvency of the states, starting with California. According to the IMF, there are 4+ trillion dollar losses in toxic mortgage securities and banks in the US have written off 500+billion and EU and Japan about the same amount. The shoe of another 2 to3+trillion dollar loss is yet to fall. Commercial property values dropped a whopping amount last month and CMBS losses are another shoe waiting to hit the US administration. The US like 'Typhoid Mary' has infected the world's economies. Nearly 20 trillion dollars will be needed to recapitalize the G-7 banks and all the governments put together don't have that much money to spend to reflate. Germany and the ECB are balking at any further stimulus. Spain, Ireland, Greece and Italy are in dire straits. In the first unemployment is hitting nearly 20%. Austrian and other EU banks have bad home mortgage loans in Baltic States, Hungary, Poland, Romania etc. Most are heading to the fate of Iceland. The Euro is rising now but may unravel as a common currency.

Japan and Germany reported a massive shrinking of GDP and exports in the Q1, 2009. The future of economies massively dependent on exports like those of Taiwan, South Korea and Singapore looks cloudy. India looks better because of internal consumption, but has huge budget and trade deficits, high debt, dwindling reserves and is maxed out and incapable of a further big stimulus package. Only China has high reserves, little debt and the best chance of being unscathed. Germany like the Phoenix has risen from the ashes many times, but like much of Europe faces a demographic meltdown with falling population. The US economy is so dependent on debt and borrowing, that it has become like a vampire needing to suck the capital (blood) of other nations. The housing numbers, revised GDP, personal income and spending, coming out next week and the non-farm payrolls the following week may decide whether there is any life left in the US economy or a final stake has killed the recovery of the undead. The recession, if not depression, will be 'L' shaped like that of Japan, whose Nikkei hit 40,000 in 1989 and twenty years later it is below 10,000.

Things have gotten so bad that Harvard economics Professors Rogoff (former chief economist at the IMF) and Mankiew (former economic chief to the US president) have suggested that a few years of 6% inflation may be necessary to lead the nation and consumer out of debt. Other more circumspect mavens equate this to dousing a fire by using a judicious mixture of gasoline and water because there is a shortage of water (money and savings). Administrations from Reagan, Bushes, Clinton and Obama have taken the teeth out of regulations to benefit their financiers to the detriment of the citizens and the republic. In schizoid desperation Bernanke is spending printed and borrowed money to buy treasuries to keep interest rates low to make mortgages affordable, create a floor for falling house prices and to avoid national bankruptcy, because rising interest rates would make servicing the US national debt impossible. Their newfound love and interpretation of Keynes ignores much of his sane words and advice, which follow.

'Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.'

'By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.'

'The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.'

'The market can stay irrational longer than you can stay solvent.'

So Bush and Obama and their teams are reliving the novels of Dostoevsky, 'The Idiot' and 'The Gambler' as they play double or quits with our children's money and their lives, while being cheered on by sycophants, ideologues, con men, Ponzi schemers and misguided mavens, in the casinos of markets and the Middle East.