Unfortunately, Congress and the Executive will likely take the easy way out with a grandiose plan to bail out a number of debt-ridden financial institutions. Congress and the Treasury are going to wield massive influence over the disbursement of monumental sums they don't even have. We won't know for some time what the repercussions of their "rescue" plan will have on the economy, but tough sledding ahead is almost certain.

Throughout our history, there have been periods of "irrational exuberance," (Alan Greenspan's term), when confidence ran high and the economy soared. These are the times when folks spend money, invest in businesses, and they're optimistic about the future. We've been in one of these dynamic cycles for the better part of 20 years (since Reagan and the mid-1980's).

However, exuberance began to wane during the past two years when several forces converged. The Fannie Mae/Freddie Mac sub-prime fiasco, overextension of credit, upticks in consumer prices, rising unemployment, and the weakening dollar, all contributed to the current dilemma. Of course, there is plenty of blame to go around.

Runaway federal spending, inflated housing and stock prices, easy credit, excessive debt, and risky lending practices all plead guilty. All of these habits were initiated by individuals as well as groups of powerful people who forgot the meaning of social accountability. There will always be human expectations that far exceed the personal ability to accept basic economic constraints.

Finger-pointing aside, what are some solutions that could restore fiscal sanity to Congress, business enterprises, and the American people? First, it's important to remember our founding principles, and the ideals that have made this country great. The federal government needs to rein in deficit spending and start to live within its means. It could do this by sticking to core functions such as protecting our liberties, and slashing redundant programs.

Next, many voices in government call for additional regulatory oversight on corporations, but that's a non-solution. There are numerous regulations on private sector companies, and if you add more, either they won't be enforced, or companies will increasingly be tempted to cut corners around the bureaucracy. Increasing regulations could also jeopardize the growth of companies that operate under sound fundamentals.

Fewer regulations that are effective in prosecuting criminal behavior might work. If internal company controls aren't working, then apply impartial external regulations. If self-policing is working well, then external controls can be eased to free up productivity in the markets. For the sake of the public, greater transparency in companies and the government could be a positive trend.

Third, during periods of economic uncertainty, fiscally sound companies will usually survive, while those that are mismanaged will falter. Incompetent companies either learn from experience, or else they are bought out by other firms. When individuals can't, or won't pay their bills, they have to tighten their belts, or else things get taken away from them. That same principle should apply to corporations and the federal government. Most Americans don't want foreign countries to subsidize our escalating debt burden.

Fourth, the government should resist the urge to bail out failed companies, because it encourages future reckless behavior and an unhealthy entitlement mentality. Indeed, once again the Feds are swooping in to the rescue. One way or another, taxpayers will have to foot part of the bill, regardless of how the politicians spin the plan with gimmicks. Currency doesn't come out of thin air, nor should it be minted unless there is collateral, and precious metals to back it up.

Fifth, if the federal government and financial corporations return to wise fiscal management, there could be some restoration of trust between the American people and these entities. Currently, the trust factor is at a low point, if it hasn't already hit bottom. Perhaps in the past, the public might have placed too much faith in these institutions.

Sixth, sound financial leadership would include thrifty actions by individuals, too. Either don't spend more than you have, or else have the capability to pay off loans, products, or services purchased on credit. Disciplined spending can lead to gradual saving and investing that can offset debt, and it would be based on realism, rather than speculation.

A common sense approach to get the economy back on track is to maintain free market capitalism in order to keep pace with global competition. Although unfettered capitalism can sometimes create havoc, free markets are the best known way to advance and enhance liberty, peace, and prosperity. Moreover, the government ought to adhere to prudent spending of revenue that's generated by responsible taxpayers.