A contrast

Bailout nation continues apace, with rescues of Freddie and Fannie set to cost up to $1 trillion:

The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.

Fannie and Freddie, now 80 percent owned by U.S. taxpayers, already have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund.

That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts. “It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.

And the Obama administration is also pushing a bailout for state and local governments:

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year's huge economic stimulus package, saying it helped break the economy's free fall, but argued that more spending is urgent and unavoidable. "We must take these emergency measures," he wrote in an appeal aimed primarily at members of his own party.

There is simply nothing that will convince the administration that government spending is not part of the solution in promoting economic recovery, and may even have the opposite effect. It's faith-based economics.

What we need to do is borrow a page from Slovakia's incoming government:

A group of right-leaning political parties dedicated to shrinking state spending looked set to form the Slovak Republic's next government after weekend elections, easing fears of deficit trouble in the euro zone's poorest country.

Four relatively conservative parties, led by the Slovak Democratic Christian Union, together won 44.1% of the vote, enough to take 79 seats in the 150-member parliament. That would put power in Bratislava, the capital, back in the hands of politicians who led a major privatization push and restructured welfare and pension programs in Slovakia from 1998 to 2006.

And Germany, which is not under pressure from financial markets over its credit worthiness, is also looking to reduce government expenditures:

Chancellor Angela Merkel announced plans on Monday to slash German federal spending by 80 billion euros (95 million dollars) over several years, including “significant” changes to the armed forces.

Foreign Minister Guido Westerwelle, who leads the Free Democratic Party (FDP) in the coalition government, said the cuts next year alone would total 11.1 billion euros.

Given the belief among so many on the left that the U.S. should follow Europe's lead, maybe this will convince them of the need to change course? Doubtful.