Yes, but these are all separate decisions with their own (opportunity) costs, aren't they?

Think of it this way:

Why would the government invest in Facebook or Twitter when there are plenty of people who already have their wallets open? That goes for many tech startups -- YCombinator alone is very beneficial for the government in an indirect way because the government no longer needs to think about funding tech startups -- someone else is already doing it really well for them.

So the real necessity for government intervention is for extremely risky and potentially extremely unprofitable ventures that allow for amazing possibilities (think NASA when the US was afraid of the Soviets). Pure scientific research is often this way as well.

And even NASA is a small fraction of the federal budget (I remember Neil DeGrasse Tyson repeating "half a penny to a dollar" a lot.

So my point is this: startups, research, or pretty much any economy-advancing investments aren't going to exceed the cost of trying to keep people happy. The War in Iraq is an example: we wouldn't be there if we weren't scared 10 years ago. We wouldn't have been eager to go to war unless it made us feel happier or safer or more content. In contrast, how content do people feel when they hear about a space shuttle explosion? Or money "wasted" on research that could be used to feed the poor?

Why did we even fund NASA again? Oh yeah, we were afraid. The United States collectively didn't give a crap about space until we imagined the Soviets creating the Death Star before us.

I'm not saying any of this is rational. Actually, I really agree with you, but the fact that money is going to startups is a good sign. The quantity is low because nothing will cost more than making people feel happy, safe, and secure right now.

No, he is simply an ignorant conservative hack. The boom and bust happened in the subprime loan market. Subprime loans are by definition those which are "sub-prime" (i.e. don't qualify for backing from Federal Agencies). This is why they were aggregated, sliced into parcels and sold on the market as CDOs rather than simply transferred to Fannie Mae.

> Sorry, if I'm unimpressed it doesn't look like effort, it looks like a PR campaign.

I think you're both right and wrong that it's a PR campaign. It can be both. Something positive, and something done for political benefit. The context is that it's very hard to get a bill passed in Congress right now unless both parties support it, and the Republicans have repeatedly blocked efforts to do things that help middle/working class folks, or help the the most serious environmental problems, etc. unless there's also kickback to the richest Americans and their favored industries (oil, military, etc.), or at least doesn't have anything that drops tax cuts or closes loopholes for them. They've opposed extended unemployment checks, for example. They've brought the nation to the very brink of default on it's debts, on an issue which historically is a routine ceremony of raising the "ceiling". That brinkmanship alone scares people, raises fiscal and market uncertainty and has a negative effect on spending -- this is beyond obvious to economists, a no-brainer. They opposed extending payroll tax cuts which disproportionately help middle/lower income class folks, and that most economists will tell you have a positive economic stimulus effect. Trying to pass anything in Congress gets turned into a political point scoring match, regardless of the actual objective merit or wisdom of it's benefits. In that context, it's much easier for a President to figure out which things they can do, just within the power of the Executive branch, to do something positive, however far from ideal it might be.