The last, last resort?

Government is sometimes viewed as the employer of last resort (see: Public Works programs, Great Depression). Recently, it's been the lender of last resort (see: massive bank bailouts by the Fed at taxpayer expense). Now, with Americans finally forced to confront the fact they can't spend money that doesn't exist, some want Uncle Sam to become the buyer of last resort:

The U.S. government needs to start buying assets to stem a bourgeoning "financial tsunami,'' according to Bill Gross, manager of the world's biggest bond fund.

A process of "delevering,'' where banks are shrinking and cutting off lending, is sapping demand for loans, bonds, stocks and commodities, driving down prices of assets of even "impeccable quality,'' Gross said. The decline may continue until the government steps in as a buyer, he said.

In other words, because Americans no longer have the perceived ability to sling cash into the lastest overcomplicated pseudo-Ponzi financial fads, Wall Street wants the bureaucrats to play Stock Market Roulette with our tax dollars. Otherwise, the falling demand for these "exotic" financial instruments may cause their price to reflect their appropriate free market value: nothing.

If the government buys, sells, lends and employs, what room does that leave for a private sector? Everyone would rather have Uncle Sam get more involved than face the music for past indiscretions. And yet it's Uncle Sam's increasing involvement that seems to perpetuate these continuing indiscretions. It's time to let everyone pay their particular piper, then start fresh once the reality checks have sunk in:

- There is no free lunch
- Debts are liabilities, not creative cash management for investments
- Even Uncle Sam can't suspend the law of supply and demand