When you spend $787 billion, there's a lot of pressure to show results. So, there's no surprise that success is being proclaimed across the country. States are saying that they've used the federal stimulus package money to create or save more than 388,000 jobs this year. Teachers, construction workers and other professions have realized the upside of stimulus cash according to reports from 33 states and Puerto Rico, with the remainder of the results being released on Friday.

Of course, the numbers "should be taken with a grain of salt," says Ethan Pollack of the Economic Policy Institute. The states were tasked to count the jobs created or protected, but the results have been of dubious accuracy. This doesn't mean the stats can't provide fodder to people on both sides of the aisle.

Columbia Business School's Frank Lichtenberg says the data shows a solid economic impact, and the Obama administration's Council of Economic Advisors believes the stimulus spending has taken care of between 600,000 and 1.1 million jobs.

And, there are those who disagree.

Everything is upside down these days. The folks with all the money and multi-million dollar bonuses are begging for a handout on the pretext that the economy will crash if they do not get one. We're not talking money for coffee or a snack, we're talking billions of dollars.

It is crashing anyway, or at least sinking. It is just a matter of what it takes down along the way. Apparently, the folks at the Treasury and Federal Reserve are now convinced that it will be everything.

The survivors are pawing at the defeated as Wells Fargo tries to grab Wachovia despite its previous tentative agreement with Citigroup Inc. (NYSE: C). While Citigroup gained a point in Wachovia deal over the weekend, the balance has since tilted in favor of Wells Fargo again.

Bank of America (NYSE: BAC) gobbled up Countrywide (done) and Merrill Lynch (NYSE: MER) (a work in progress), while JPMorgan Chase (NYSE: JPM) corralled Bear Stearns and Washington Mutual (NYSE: WM).

Sadly, only the federal government was big enough to swallow the problems of American International Group (NYSE: AIG), Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Otherwise,those in the know think world financial markets would have crumbled due to the collateral damage, (pun intended).

When I posted Congress is screwing up -- think backstop not bailout!, I was concerned with the psychological effect as much as the financial effect of not approving the funding, but no doubt the people suffering the most are not those who created the pain.

Recently CNN/Money posted an article called Who gets rich off $3 gas - who doesn't, which I thought I would bring to your attention. The rising cost of gasoline at the pump, now $4 in some places, is hurting many people on fixed incomes, like seniors and students, and those commuting long distances to work, or for work.

There is plenty of public fury to go around and while OPEC and the big oil companies get a lot of the blame, your local gasoline station owner has to face the heat close up and personal, even though on this food chain they benefit the least from rising prices.

The rescuing of the domestic financial markets (banks and Wall Street investment houses) by sacrificing treasury notes, exacerbating deficits, all the while lowering the prime rate and discount rate, have pushed oil prices higher, as oil producers to their chagrin, are paid in devalued dollars and are trying to maintain equilibrium.

My colleague Trey Thoelcke posted a story on Friday regarding Presidents Bush's concern that the Federal government should not "overreact" to our current economic plight for fear of doing more damage than good.

The president's concern struck me as odd because most folks having an IQ higher than their age would probably agree that President Bush overreacted in Iraq, and underreacted at home. Thus increasing the probability that we would fall into an economic quagmire that the best and brightest would have difficulty escaping.

I think I am being very generous when I say "increasing the probability" because many on the left and on the right of the political spectrum would be much more frank and say Dubya, you own this one pal!

That being said, one might argue that Bush has his rights and his lefts mixed up, as well as his rights and his wrongs. I happen to agree with the president that the federal government could overreact (and has) and do the wrong things -- with bipartisan support no doubt. For example I think the $156 billion tax rebate is very bad policy, not helping anyone and hurting everyone -- see Serious Money: Stimulate productivity not consumption. I hope anybody reading that particular Serious Money post finds it worthy of starting an e-mail storm because not enough folks understand this point.

As a registered independent who voted for Obama on Super Tuesday, I was interested in reading BusinessWeek's take on Obama's likely impact on the U.S. economy. Its conclusion is that Obama is thoughtful and refreshing and is willing to work with business leaders, many of whom may reject him because he does not hew to the Republican line on taxes.

Last Friday, while Guest Hosting CNBC's Squawk Box, I spoke with Obama's economic advisor, University of Chicago professor Austan Goolsbee. He made two points that I found interesting. First, he said that Obama is very enthusiastic about the prospects for the U.S. economy and the stock market. Second, he suggested that Obama was months ahead of Hillary Clinton in proposing an economic stimulus package.

I asked Goolsbee what he thought was the cause of the economic slowdown. He thought the problem was the cash-strapped consumer and that tax rebates were the solution. I argued that the problem is that banks lack sufficient capital to offset the write-downs they're taking in the wake of the evaporation of demand for the Collateralized Debt Obligations (CDOs) they hold. Goolsbee thought this was a secondary problem and did not embrace my proposal to recapitalize the banks.

What does the coming year hold for the economy? BloggingStocks' Peter Cohan considers five issues that will factor heavily in 2008.

Sovereign Wealth Funds (SWFs) are estimated to be between $2 trillion and $15 trillion. That's a wide range, but even at the low end, it's a lot of money. The SWFs are potentially economic and political Trojan horses. They are using the current problems in the credit markets as a chance to buy stakes in U.S. banks for relatively paltry sums. It remains to be seen whether they are getting in at the bottom or whether they're foolishly buying in way too soon.

However, if they get big enough stakes in strategic industries in the U.S., they will be in a position to influence U.S. policy. For example, if the funds do not like U.S. Middle East policies, they can threaten to withdraw their capital. If that capital is hard to replace, the U.S. will find itself needing to choose between imperiling the survival of its banking system or changing its foreign policies.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

As CNBC hosted a presidential debate targeting the business audience, the issue of protectionism, or the economic policy of restraining trade between nations, was raised in a number of ways: Why do we have trade deficits? Why do both heads of a household need to work versus one? Why do people have to work so many more hours to live at the same standard of living as their parents? Why is the U.S. dollar weak? This is a debate that will only intensify as the Republicans and Democrats pick their candidates to face-off against each other.

Utilizing protectionism as the political hot button for a presidential campaign always carries the risk of unintended consequences. A candidate could actually convince the American people that protectionism could work, as the merits of globalization can often be hard to communicate and are often only understood after having experienced the economic limitations of protected borders.

The irony of CNBC's debate is that it was hosted in Michigan. This is the U.S. state which has stuck most closely to strong unionization and attempts to limit competition, and has also registered some of the weakest economic growth in the U.S. since the shift from a manufacturing to a service economy began some twenty-five years ago.

Senator John McCain brought up the Smoot Hawley Tariff Act which led to the Great Depression and World War II during the debate. Closed borders equal closed minds which translates into some bad economic times. The temptation of protectionism is one that must be avoided.

In yet another sign of the growing pressure on consumers, retail sales rose 0.3% in August, less than the 0.5% economists have expected. Excluding autos, sales fell 0.4%. This data will likely pressure stocks and underscore the call from Wall Street for the Federal Reserve to cut interest rates at the September 18 meeting of the Federal Open Market Committee. (Update: Consumer confidence remained low in September, further bolstering the case for a rate cut).

There are plenty of economic signs for investors to ponder. The Wall Street Journal is reporting that the amount of borrowing by banks under the Fed's primary credit program surged to $7 billion, the highest level since just after 9-11. Prices for imported goods unexpectedly fell in August because of declines in oil and natural gas prices, providing a temporary check on inflation, according to Bloomberg News.

Everyone and their brother and sister on Wall Street and CNBC thinks that the Federal Reserve should cut interest rates yesterday. The problem is that the Fed doesn't seem to agree with that view.

Data released in the Beige Book regarding economic conditions around the country said that the credit crunch had a "limited" impact on the economy where "activity has continued to expand." Many investors read that to mean that there is no rush for a rate cut and sent the Dow Jones industrial average down more than 171 points last I checked.

Bloomberg News noted that, "The report suggests that the housing recession and global financial-market turbulence stemming from U.S. subprime-mortgage defaults has yet to have broader effects on the world's largest economy."

It seems like the Fed is trying to wean investors from expecting it to ride to the rescue with interest rate cuts whenever things go wrong. The Wall Street Journal (subscription required) argues that while a Fed rate cut may still come in two weeks, "officials may not see the same need for aggressive easing that financial markets expect."

This sounds like investors may be getting some tough love for Bernanke which though unpleasant for now may be the best thing in the long run.

As Zac Bissonette wrote so eloquently yesterday, the nation rests comfortable in the assurances of President Bush that the economy is strong and the current meltdown correction is nothing to worry about. So don't cancel your cable television, and take down that Craigslist ad for your Lexus.

I thought this might be a good time to remind our readers of the president's mastery of economic policy, via his comments as compiled by Jacob Weisberg of Slate.com.

"I promise you I will listen to what has been said here, even though I wasn't here." - at the President's Economic Forum in Waco, Texas, Aug. 13, 2002

"We need an energy bill that encourages consumption." - Trenton, N.J., Sept. 23, 2002

"My plan reduces the national debt, and fast. So fast, in fact, that economists worry that we're going to run out of debt to retire." - radio address, Feb. 24, 2001

"Because the - all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those - changing those with personal accounts, the idea is to get what has been promised more likely to be - or closer delivered to what has been promised. Does that make any sense to you? It's kind of muddled." -- explaining his plan to save Social Security, Tampa, Fla., Feb. 4, 2005