A painful (though amusing) portrayal of where we are in this situation is represented in the Saturday Night Live skit on the right, which depicts many of the winners and losers, the inadequacy of our government, and the corruption and interplay of many of the agents involved. NBC actually editted this online video after it was originally broadcast, in response to political pressures, but then was forced by followup pressure to restore the original material (at least for now)... which leaves one with the feeling that historical depictions of these present events may be unreliable.

The bottom line is that our future is more uncertain than we may have previously believed. However, history indicates that in the long view, the economy will ultimately get back on track; it's just that if you're in the wrong place, with respect to retirement, you may suffer substantially. The resulting impact of these new known deficits (only) is expected to increase our government debt from 37.9% of GDP ($5.4 tr) in 2007 to 38% of GDP in 2008 and 40.2% in 2009. I'll remind you that if you try to get a mortgage with this much debt relative to income, the bank won't let you have it! The only realistic solution to this problem of over-indebtedness is thus to:

• curtail further deficit spending
• increase government revenues to address shortfalls (those with constrained visions believe this means taking steps to grow the economy in ways that are not a zero sum game, rather than by blindly increasing taxes on entities that enable economic growth)
• use those additional revenues to pay down the debt as quickly as possible

Those with an unconstrained view can instead compartmentalize laudable goals from the necessary steps to achieve them, and perceive that adjustments are not necessary (though the financial system will adjust on it's own). The tradeoffs between risk vs reward are classic dilemnas to have to deal with; tamper with either side of the equation, and it can be a recipe for disaster on the counterbalancing side.

Much of the current crisis may have been brought upon us by the best intentions of good people in pursuit of reasonable goals. A study of how we think and act in such crises is thus relevant, though belated. Now fools and demagogues, with cameras running to record their hand wringing and expression of outrage, take the stage to claim they were wiser, smarter, or better leaders to chart a safer course. The real risk we all deal with in this situation is if it contributes to further growth of government, as the resulting bureacracy will likely slow, rather than grow, the economy itself. And don't forget that in order to get a bill to pass, it was loaded up with pork (though one might question if the sense of urgency for passage was as great as proposed, or if the  '

Justice and accountability will eventually be realized for the malfeasance that will ultimately be found for these problems, and will be brought to those who we will chose to hold responsible. In the meantime, markets must be protected. Time and consumer confidence are as much the enemy as the ambiguities of these agreements. We are thus left with awkward tradeoffs against constrained futures, and reacting to, rather than being proactive towards, chronic problems. But as always, we thus must be careful what we believe, and what we wish for:

• In the Country of the Blind, the one-eyed man is king