It use to be the classic response to the question, "Where's your homework? -- The dog ate it." Soon it will be, "Well teacher, it's sort of like this, the economy has just been getting me down and I had to get a second part-time job to help the family."

Now this cynical view may or may not be real, it may just be a better sob story, however it could be. And the fact that it could be is going to expand the use of the economy as an excuse for everything.

Unprofitable businesses are laying off workers. So are less profitable businesses and even profitable businesses. Any and all business negotiations you enter into in the coming year will try and get some leverage out of the economic woes -- whether it has any validity in your specific case or not.

This is certain to breed some level of mistrust and add to the grim outlook we are seeing in most quarters. This will be just one more bit of stress we do not need. And who do you think is going to get the most mileage out of this excuse? Politicians -- that you can bet on.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

Is Ben Bernanke the new Mary Poppins?

His "spoonful of sugar" of choice is slashing 225 basis points from the federal funds rate since September. Today, he told the U.S. Congress that more rate cuts will probably be coming.

"In part as the result of the developments in financial markets, the outlook for the economy has worsened in recent months, and the downside risks to growth have increased," he said in his prepared testimony. "To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so."

He goes on to mention that demand for housing is weak because of the "the virtual shutdown of the subprime mortgage market and a widening of spreads on jumbo mortgages" while the labor market has suffered as the gains in service sector employment slowed and construction and manufacturing jobs fell.

In the midst of all the bad news it's hard to imagine the stock market ending the year higher than it started. However, that is entirely possible and probably much better than a 50/50 bet. If you want to play it safe consider buying into an index fund or exchange traded funds (ETFs) instead of banking on individual stocks.

For broad coverage you cannot beat the Vanguard Total Stock Market or the Total International Stock funds with the lowest fees and longest history in this area. I think it has also been generally accepted investing strategy over the last few decades that in bearish markets there is a run to quality and "guns and butter" stocks. If you were to follow this old adage you would be considering three sectors, healthcare, defense and consumer staples.

Mutual funds and ETFs (with less history) are less volatile and offer greater diversification than most investors could achieve, and at much lower cost. If you dollar cost average over the next few months you should also be able to smooth out some bumps in the current market.

When the political machine goes to work to juice the economy the market has most often responded positively. That does not mean it's smart for the country, but since when is a politicians first thought about the country.

In Federal Reserve Chairman Ben Bernanke's testimony before Congress today, he indicated that the most recent economic data show a "resilient" economy outside of housing. However, he also mentioned that growth should slow "noticeably" as the housing crisis intensifies. The recent rise in oil prices and its potential impact on inflation was also discussed.

Recent economic numbers, including the stronger-than-expected initial unemployment claims numbers this morning and productivity statistics yesterday, suggest that the economy is slowing but not deteriorating rapidly outside of housing. This indicates that there is no pressing need on an economic basis for a cut in the Federal Funds Rate at the December FOMC meeting. Other Fed officials have also emphasized this in recent testimony.

This need for a respite in interest rate cuts is particularly important with rising oil prices. Although core inflation, the Fed's preferred benchmark, is currently under control, there are still concerns with inflation that the Fed must address and manage to maintain credibility.