The economic news in our nation has become quite grim lately. People are nervous, and rightfully so. The storm clouds aren’t just on the horizon. Some of them are already overhead.

The biggest weight on the American economy is the housing crisis. The root of this fiasco is fairly simple. Banks and mortgage companies offered risky loans to people who really couldn’t afford it and people took those loans. Fannie Mae and Freddie Mac threw gasoline on the fire by buying up the loans from the banks and mortgage companies, thus absorbing some of the risk. In the end, there are a bunch of people defaulting on their mortgages because they never could actually afford them. All of those bad loans are what has been collapsing the financial houses in the past few weeks.

Normally, the collapse of a company wouldn’t mean much to the average person unless that person was invested in the company. Even then, a properly diversified portfolio wouldn’t be too severely damaged by the death of a single company. But because some of these companies were labeled as "too big to fail" the federal government stepped in to bail them out.

The rough numbers are staggering. The federal government has already provided $29 billion to fund JP Morgan’s acquisition of Bear Stearns; $400 billion to nationalize Fannie Mae and Freddie Mac; $85 billion to bail out AIG; $50 billion to insure money market funds; and as of the writing of this column, the federal government is working on a $700 billion blanket bail out plan. The federal government can’t spend over $1.2 trillion without it hitting the pocketbooks of the taxpayers.

Other economic pains are also hitting average folks. The rising cost of fuel is forcing people to spend more to fill their cars and heat their homes.

The cost of food has increased dramatically in the past couple of years. The ethanol craze and the cost of fuel to ship food are pulling ever more dollars out of consumers’ wallets.

The weak dollar and inflation are also taking a bite. Many of the goods that Americans consume are produced overseas and the weak dollar is making the price of those products increase. Meanwhile, inflation is helping to drive up the price of domestic goods.

The stock market continues to be extraordinarily volatile. This is making the financial stability of many Americans uncertain.

The unemployment rate is up as America continues to shed tens of thousands of jobs. Employed Americans are also seeing fewer and lower wage increases. On this issue, Wisconsin is worse off than most Americans ranking 40th in personal income growth according to the U.S. Bureau of Economic Analysis.

It’s not all gloom and doom. America’s economy is experiencing a downturn, but nothing worse than Americans have faced before. We’ll pull together and get through this, as we always have. But while this too shall pass, there’s no denying that times are tough right now.

Given the current economic situation, government should think long and hard before asking the taxpayers for more money. Both the Germantown and the West Bend school districts have put referenda on the ballot in November for tens of millions of dollars in additional funding. While both districts have some real needs, so do the taxpayers whose taxes they want to raise.

Next year, Wisconsin’s Legislature will craft a new biennial budget. There are already hundreds of proposals that would increase state spending anywhere from a few thousand dollars to billions of dollars. Unfortunately, there aren’t any proposals to actually decrease state spending.

It is also a near certainty that the federal government will increase taxes next year regardless of who is elected president. The massive amount of additional spending that has been promised in the past few months will have to be paid for and it’s doubtful that Congress will have the discipline to cut spending to offset the additional spending. Furthermore, history shows that Congress can rarely resist tax increases in the year after a presidential election.

In short, all levels of government are asking for more money at the same time that Americans are facing financial uncertainty and having to spend more just to run their lives. When money gets tight for average people, they find ways to make do with what they have. Government should follow that example.