Does anyone seriously think the feds can do a better job? These are the people who run the Post Office…and Amtrak, for Pete’s sake. Even with monopolies, they can’t make money. Now they’re the majority owners of auto companies, insurance giants and mortgage firms. Hardly anyone buys a house in America anymore without the help of a government-owned mortgage business. And soon, you won’t be able to get a doctor to take your temperature – assuming they still do that – without getting a bureaucrat’s approval.

In theory, the feds take charge of more of the economy, and spend more money, so they are able to keep the GDP from going down. The feds have been pumping about $4 billion per day of deficit spending (money they didn’t collect in taxes) into the economy. The bankers say ‘thank you very much’ for the business and pay themselves big bonuses. But this money doesn’t stimulate the private economy…it replaces it.

But it replaces it with zombie ‘growth.’ The government-driven part of the economy is largely brain-dead. It is a waste. What real, positive boost to prosperity comes from someone filling out health care forms for the feds? What benefit do we get from tax accountants? How about from the ambulance-chasing lawyers?

(Yesterday, driving to work, we saw an ad in Baltimore’s inner city: “Birth injury? Malpractice? Workplace injuries? You need a lawyer!”)

How about from any of these multitudes of mid-level bureaucrats…lobbyists…handlers…interveners…meddlers…?

The feds spend money. But the money is like warm water to a boat hull. It just stimulates the barnacles. Gradually, the boat slows…and sinks.

What can you do? Haul it out and scrape the barnacles off! That’s what Ben Bernanke is proposing. But wait…the barnacles vote!

And they make campaign contributions…

But here is Ben Bernanke talking tough. ‘If you don’t straighten up,’ he seemed to say, ‘you’re going to end up like Greece.’

Wait…this has a familiar ring to it. This is the same Ben Bernanke who is holding rates near zero to make it easier for the feds NOT to straighten up. Like those of his predecessor, Bernanke’s centrally-controlled lending rates are sending out just the wrong signal at just the wrong time.

And like Greenspan, he can get away with it…for now.

But maybe not for long. On Monday, US T-note yields ran over 4%. “The fun’s over,” said old-timer Richard Russell. It looked like the end had come for the long bull market in bonds. Bond yields have been going down since ’81. But they seemed to hit bottom near the end of 2008. What we’re seeing now – possibly – is the beginning of the long march in the other direction.

This seemed even more likely because at the end of March the Bernanke Fed lost one of its pumps. It can no longer buy up the toxic mortgage-backed bonds of Wall Street, thereby giving the banks money to buy US Treasury debt.

Still, on Wednesday, threats of more trouble from Greece sent investors towards US bonds for safety.

“Greece Rescue Not Going According to Plan,” was the headline at Bloomberg.

“Demand strong in US 10-year Treasury debt sale,” reported The Financial Times.

But by yesterday, it looked like the plan for US debt was not going well either.

“Treasuries decline after $13 billion auction of 30-year bonds,” said another Bloomberg report.

Jobless claims unexpectedly rose last week. What do you expect? This is a Great Correction. Learn to love it.

“China offers high-speed rail to California,” says The New York Times. Get used to that too. Who’s got the money? Who’s got the new technology? Who’s got the engineers…the people who actually know how to do something.

Hey China…let’s make a trade. We’ll give you 1 million lawyers for 100,000 engineers. Or, how about 20,000 lobbyists for one good metallurgist? Heck…we’ll throw in 535 members of Congress.

Hold the Congressmen? Okay…guess we’re stuck with them.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.