CNBC is reporting a Second Stimulus May Arrive by Christmas - I hope it looks different than the last one.

It is being reported that

House Speaker Nancy Pelosi on Wednesday urged passage of at least $61 billion in new economic stimulus funding this month, but said the future of the legislation requires the cooperation of Republicans in the Senate and President Bush.

I am having deja vu all over again! At least $61 billion but discussions are ranging up to several hundred billion dollars. I hate this idea and stated so numerous times last March, including one of my most important stories of the year (I think) Fund roads & bridges NOT mad money stimulus.

How many billions are Paulson and Bernanke asking for? Seven hundred billion dollars. Now that's real money! And the administration is touting this new program as if they knew what they were talking about.

We have heard folks wondering how and why Treasury Secretary Paulson should be given the power and discretion to do as he sees fit with this bailout money.

We have heard people speaking about the pain and the injustice, along with the doubts and reservations about the concept of giving away so much money.

Actually giving this handout to companies that have demonstrated such corrupt thinking and irresponsibility (see SEC opens the gates and the world drowns) is a supreme injustice given that their decisions led to the collapse of once-mighty financial industry titans. See Lehman Bros 158-year sad ending for just one example.

Has anyone asked how the Treasury came up with that number? Can someone explain the difference between $700 billion and a blank check?

"A billion here, a billion there, and pretty soon you're talking about real money."

To paraphrase the late Senator Everett Dirksen (R-Illinois), if a couple billion is real money, what's $400 billion amount to? Fiscal trouble for the United States, says an economist.

The U.S. federal budget deficit will double this year, to $407 billion, from $161 billion last year, the Congressional Budget Office announced Tuesday, in its revised baseline projection report (pdf).

The CBO said a weakening economy, spending for the Iraq and Afghanistan Wars and the War on Terror, higher entitlement spending, and a slowing growth rate in federal receipts are among the factors that will push the deficit to 3% of GDP this fiscal year, which ends September 30.

The deficit will rise to $438 billion next year, fiscal 2009, remain roughly at that level, $431 billion, in fiscal 2010, before tapering to $325 billion in fiscal 2011.

The CBO also expects U.S. GDP to grow just 1.5% in 2008 and slow to 1.1% in 2009.

Economist Glen Langan said the multiple $400 billion deficits are bad enough, but they could rise considerably, if the U.S. Treasury's bailout of Fannie Mae and Freddie Mac does not go well. "If the housing market does not stabilize in the year ahead, Treasury could end up spending tens of billions more per year," Langan said. "Nearly all of that cost would be born by the taxpayer, which means the deficit will increase."

New York Times columnist Thomas Friedman, who perhaps most-accurately conceptualized the revolutionary production shifts implied by globalization in The World Is Flat, has a 'radical' economic prescription for the United States, as it moves toward the second decade in what is quickly becoming the century of change.

Friedman suggests that the United States try nation-building....at home.

Moreover, Friedman makes the case for nation-building as good for U.S. business - - a much-needed shot-in-the-arm for the U.S. economy.

U.S.: inadequate infrastructures for a major power

Friedman's main concern: the U.S.'s inadequate infrastructure (electric grid, roads/bridges/rail network, air travel system, hospitals, among others), which is antiquated compared to the infrastructure of the U.S.'s chief economic rival, China. Friedman has just attended the 2008 Olympics in Beijing and its clear China's public investments - - better airports, roads, parks, to go along with the sports venues - - have impressed him.

It's also clear to Friedman that the U.S.'s period of underinvestment is holding the nation back economically, and that has to change if the U.S. expects to remain commercially competitive on the global stage. Economist David H. Wang told BloggingStocks he agrees, for the most part, with Friedman's analysis, but adds that the journey to a better infrastructure is not a strictly an economic equation.

Few would deny that the new U.S. president, Democrat or Republican, will face a plethora of concerns and problems after reciting the oath of office in January 2009.

One issue that sort of presents the 'problems panorama' in a snapshot has, curiously, received light news coverage lately -- is the U.S. budget deficit.

Time was, just a short decade ago, the federal budget was in surplus. However, in 2001 a federal tax cut occurred. That fact, combined with required spending for the war on terror / Iraq War, and the absence of a tax increase to pay for that increased spending, has primarily led to a projected $553 billion deficit for fiscal 2008, which ends September 30, 2008, and a $403 billion deficit for fiscal 2009, which begins October 1, 2008, according to Congressional Budget Office research (pdf).

Three factors that could balloon the deficit

In the view of many, the existing deficit is large -- but still manageable -- in the context of a $2.9-3.0 trillion federal budget. However, three factors could markedly increase the budget deficit in the immediate years ahead, and in doing so add to the new president's woes, economist Richard Felson told BloggingStocks.

First, there's the U.S. economy. If it falls into a recession (if it hasn't already), federal receipts (such as corporate and individual income taxes) will decline from current projected levels, and social program costs will increase, "adding $20-$50 billion to the deficit," Felson said.

The lowdown on the high and rising U.S. budget deficit for investors and readers? A triple whammy: higher prices for imported goods, higher interest rates, and higher taxes, among other negative consequences.

The budget deficit is expected to increase to $490 billion in Fiscal 2009, which begins October 1, 2008, Bloomberg News reported Monday. The increased shortfall is due to a worsening U.S. economy, which lowers government receipts, and spending increases for the wars in Iraq, Afghanistan and the housing bailout, among other spending responsibilities.

Increased spending to pay for the housing bailout, including assistance for Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) will further increase U.S. Government borrowing, and the supply of dollars, "which almost guarantees that the dollar will fall more," so says currency trader Andrew Resnick. As a result, companies exporting goods to the U.S. are likely to raise their prices, a cost increase Americans will feel keenly.

However, Resnick said the dollar is likely to fall less, if the U.S. government increases taxes or the Fed increases short-term interest rates.

First the good news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.

Now the bad news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.

U.S. House Speaker Nancy Pelosi, D-California, said she would raise the prospect of a second stimulus bill when she and other Congressional leaders meet with President Bush this week, CNN reported Monday.

Anemic U.S. economy

Speaker Pelosi did not provide specifics but said March 2008's "disturbing unemployment numbers" which indicated the nation's economy lost 80,000 jobs "compels the President to work with Congress on a second stimulus package to get our economy back on track, create jobs, and speed assistance to families struggling to make ends meet," CNN said.

On Monday, the Bush Administration said it was too soon to talk about the need for a second economic stimulus package because the first one had not been fully implemented yet, Reuters reported.

It is alarming to me that the same people who screw up the economy (or stand by watching) are the ones that are now promoting the remedies. They have proven without a shadow of a doubt that this is not their strong suit. The proposed economic stimulus package has bi-partisan support and calls for an estimated $156 billion of tax rebates ranging from $500 to $1,000 (+ $300 for each child) that might show up in May.

If we are going to add on to our already humungous joke of national debt, than I want to invest this capital in something that will bring a higher return on invested capital (ROIC) than the paltry one time mad money. That expenditure should be for national infrastructure projects like roadways, bridges, tunnels, and waterways.

We have all heard about the poor condition of our national infrastructure and the hundreds of billions of dollars of repair work and replacement that is desperately needed.

This alternative would bring visible results that every single person in the country would benefit from and improved linkages always stimulate economic growth. Road improvements even reduce fuel consumption by shortening routes and reducing friction both strategically and physically.

What international transaction perhaps best symbolizes the U.S. dollar's rough year of 2007?

Giddy British tourists with more money to spend in New York than, seemingly, Donald Trump?

How about an international attraction that won't take dollars? In November 2007, India's Taj Mahal, one of the seven wonders of the ancient world and India's most popular shrine, announced it would no longer accept the dollar, citing the greenback's weak currency status, and accept only rupees, Bloomberg News reported Thursday.

Since January 2001 or during the past six years the dollar has fallen about 55% against the euro, 35% against the British pound, and about 10% against the Japan's yen. On Thursday the dollar was mixed against the world's major currencies. The dollar gained 0.62 cents to $1.4320 against the euro and 1.50 cents to $1.9831 against the British pound, but fell 0.25 yen against Japan's yen.

When a currency, such as the dollar, declines versus another currency, that means the purchasing power of those holding the dollar declines - - a sort of 'non-legislative' tax increase. It goes without saying that most citizens, and institutions, don't like to hold currencies that decline in purchasing power.

Gee whiz what a shock Crude hits new record above $95 in after-hours trading and other commodities will not be far behind. Can't wait to see what gold, sugar, and even water will cost as the dollar becomes more worthless. I have written many recent pleas to leave the rates alone because it was fairly obvious what would happen if rates were cut yet again. In a 9 to 1 vote the Federal Reserve Board voted to cut rates by a quarter point to 4.5%.

Only Thomas Hoenig, president of the Federal Reserve Bank of Kansas City opposed the increase. He preferred no change in the funds rate. Let's make him chairman of the board. Better yet, maybe he would make a good write-in candidate for president. I wonder what he thinks of federal spending, the war in Iraq, health care, education -- He has certainly peaked my interest and I do not know him at all, but he has made a good impression so far.

In Europe the Dollar is falling, while gold passes $800. Where will it all end? It cannot end well if nobody wants to "pay the piper". When you consider the reasoning behind the Feds rate cut you have to be concerned. The rationale behind the cuts is that the lower borrowing costs will induce consumers and businesses to boost spending, energizing economic growth.

This one obviously became "A Bridge Too Far" fetched, as Alaska Abandons Infamous 'Bridge to Nowhere' included in last year's budget as part of the traditional pork-barrel spending that goes on in Washington -- usually following long speeches about trimming the fat.

There is probably nothing more universally consistent in a campaign speech than the promise to cut federal spending. Of course politicians are equally consistent on failing to do so once they are in office. However, in the case of this infamous bridge to an Island of a few hundred residences, the political heat, under the proverbial magnifying glass, was too much.

The public outrage and direct lobbying from various budget watchdog groups and with the support of Senator Tom Coburn, Representative Jeff Flake, and Representative Mark Kirk, the State of Alaska has officially abandoned plans to pursue the infamous Gravina Bridge. Money is still earmarked for the state, but the recently elected new governor decided to drop the project.

Wall Street and its scoreboard stock exchanges are jubilant with the 0.5% cut in the prime rate. But all is not well. As expected, gold and oil hit record highs on the news yesterday and the sky's the limit. The dollar will be losing value and foreign investors will be buying increasing amounts of our equities, including land, buildings, public and private companies. Expect American ownership to decrease.

The fact that the Federal Reserve sought to pacify investment bankers and individuals who made bad deals in an effort to shore up what was starting to look like big trouble in the "heartland" is not, I think, worthy of celebration. Yes, we should be grateful that Ben Bernanke and crew are keeping a watchful eye on the pulse of the economy and did not wait until we drowned to throw in a lifeline. But for this conservative group to make the cut they had to think things were bad, and that is not exactly heartening news.

Transportation stocks are not doing well this morning, and neither are delivery companies. FedEx Corp (NYSE: FDX) and United Parcel Service (NYSE: UPS) are showing losses or treading water, even though the overall market is notably up. Why? Fuel costs.

We heard a lot of nice sentiment from President Bush Tuesday night but, alas, it is another case of too little, too late. (Or... is it never too late?) It would be great if the $18 billion in "pork barrel" spending he mentioned is really cut by restricting the ease with which our legislature can attach its pet projects to entirely unrelated bills under the cover of darkness. This is the equivalent of about seven weeks of spending on the Iraq war, at current levels.

It also begs the question as to what the administration was thinking until now, as we spent perhaps $100 to $120 billion during his watch on an abundance of special projects. If we give the President and his team credit for on-the-job-training the first year, even though every candidate makes cutting government spending a part of his platform, the administration should still have done something earlier, especially with Republicans steering this ship! This is very embarrassing -- and shameful!

It makes me think the attitude in Washington was that 'the Democrats got theirs, now we're going to get ours'.