Is “reality” the sanitized and engineered nightly news on abc or cnbc, or is it the sky-high fuel and food prices draining your pocketbook? Reality might be unpleasant, and it may not sell newspapers or tv ads, but it is what puts a roof over your head and Levis on the kids.

Yet much of America remains entrenched somewhere between Alice’s rabbit hole and Never Never Land.

Here is an example: A few months ago, a friend of my father’s was working the check-in desk at a hotel in Regina, Saskatchewan, during the province’s annual agricultural exhibition. The city was booked solid due to the influx of agribusinesses and farmers from across the country and the United States.

A visiting American had reserved a room, but upon arrival was outraged at the price. She couldn’t believe that the room cost more in U.S. dollars than it did in Canadian. Not only did the lady accuse the hotel of trying to cheat her, but went on to rant about how it was impossible for the U.S. dollar to be worth less than the Canadian dollar because everyone knew America was the most powerful nation on Earth and that there was no way anybody else’s money could be worth more than America’s. Despite assurances that the U.S. dollar had fallen in value, directions to the nearest bank down the street, and warnings that most of the hotels in the city were probably sold out, the lady stormed out in protest.

Perhaps we shouldn’t blame her too much. With all the contradictory mumbo jumbo spewing from frontline economic commentators and Hollywood-gossip-oriented news providers, it is little wonder that so many people remain oblivious to the economic reality facing America.

If your news repertoire consists of the nightly 6:30, you might be forgiven for thinking that the “mortgage crisis” and the “downturn in housing” have resulted in nothing more than a slight “weakening of the U.S. economy.”

For example, this cnn article quotes President George Bush as saying, “Our economy is structurally sound, but it is dealing with short-term disruptions in the housing market and the impact of higher energy prices,” the result of which would be merely “slowing growth” (emphasis mine throughout).

Don’t worry about the “short-term disruptions,” we are told, it is no big deal. The government has everything under control and will be giving $600 to just about all U.S. taxpayers in an effort to stimulate consumer spending. Things will be back to normal in no time.

Hopefully this isn’t news to you, but the economy is not structurally sound, and the short-term disruptions have a good chance of sending the nation into the worst long-term recession it has experienced in years—that’s why the government is pushing so hard for its stimulus plan.

Richard Benson, economist and author of Benson’s Economic and Market Trends,agrees. “It’s a rare sight, indeed, to see not only the president of the United States but the secretary of the Treasury, chairman of the Fed, and both parties in Congress, in panic mode pushing for greatly increased government spending,” he says. “Financial markets around the globe sensed the panic and responded dramatically, creating volatile and sinking markets overnight.”

Benson raises a good point. If the economy is so sound, why the unprecedented government action to quickly borrow billions—and then hand it out to 117 million families who have so much debt they are cutting back spending—for the expressed purpose of encouraging them to spend more money?

And isn’t it worrisome that as a society we measure how well the economy is doing not by how much we produce but by how much we spend? Seventy percent of the U.S. gross domestic product (gdp) is composed of consumer spending, which is why Bush’s money giveaway is supposed to boost the economy. According to the Union-Tribune, the remaining portion of America’s gdp is “mostly made up of business and government spending.”

Bob Moriarty, president of 321gold, argues that the spending plan will actually make matters worse over the long term. The government in “Washington is going to pour more fuel on the fire in a futile attempt to prevent people from knowing what is going on,” he writes. “When you have created a problem by having too-cheap credit, you cannot solve the problem by dumping cash out of helicopters.”

Students of history probably see uncanny parallels with the fall of Rome and how it began massive public handouts as it accelerated toward its collapse.

But if warning signs aren’t abundant enough, the Federal Reserve’s decision last week to slash interest rates again should have been a wake-up call. In an emergency meeting, the Fed cut interest rates by three quarters of a point, the largest rate cut in 20 years.

Yet again, the media greeted the cuts with a chorus of how lower interest rates are good for the economy. Few commentators talked about how the rate cut will be a huge nail in the coffin for the U.S. dollar—a dollar that has already hemorrhaged more than a third of its value over the past six years.

Here is a BusinessWeek example of typical unfettered optimism echoing from mass-media America:

The Fed originally was created to deal with just this kind of financial crisis, and it’s capable of pumping enormous amounts of money into the financial system if needed. “I have a basic faith in the Fed,” says Christina D. Romer, an economist at the University of California at Berkeley. “We don’t make the kind of mistakes that we used to.”

Watch this incredible video clip from fox News, which originally aired Aug. 17, 2007, a full month after the current credit crisis erupted. The exchange is amazing in view of what has happened since then. See how the popular, mainstream financial “experts” were so ignorant of economic reality that they completely misled any investors listening to them. Author, financial adviser and former economist at the U.S. Department of Commerce Ben Stein, along with two other commentators, recommended buying U.S. bank stocks, including Merrill Lynch, calling them “super bargains,” and “astonishingly well-run” companies.

Talk about bad advice. Since then the financial services sector has cratered.

Along similar lines, watch this fox News video (originally aired on Dec. 29, 2006) showing how media “experts” completely missed the housing bubble. These experts were trying to say that it was virtually impossible for housing prices to fall and that housing was always a good investment. Their prediction was for housing to rise on average 10 percent in 2007.

Since then, what has happened? The housing market has gone into free fall, and median home prices have fallen the most in 40 years.

The above fox News reports are typical of the views the big media corporations have blanketed America with for the past couple of years. Not only have the mass media got it completely wrong, they have also done a good job of heaping disrespect on any guest that disagreed with the “all is well” mantra.

And some do disagree with the blissful mass media headlines indicating that America is facing a level of economic trouble not experienced in generations. “As our economic ship continues to spring leaks, the Goldilocks crowd still clings to the false belief that the Fed can easily keep us afloat with a few more rate cuts,” says economist Peter Schiff. “This comfort has sustained many upbeat forecasts despite overwhelming evidence of an unfolding economic and monetary catastrophe of historic proportions.”

Stephen Roach, former chief economist for Morgan Stanley, agrees. “We have a market-friendly Fed possibly injecting a lot of liquidity in the system which will set us up for another bubble economy,” he says. “I’m sort of worried that all they did [by lowering the interest rate .75 percent] was to hit the snooze button. [This is] excessive monetary accommodation that just takes us from bubble to bubble to bubble.”

Doug Casey, chairman of Casey Research and bestselling author, says that “the more control a government has, the longer it can put off the day of reckoning. But the longer the artificial structure is propped up, the bigger the mess will be when it eventually collapses. From my point of view, what will happen next is almost written in stone. The only real question is: When? … But now, more than a generation after the last serious crisis—and four full generations after the Great Depression—I think there are lots of reasons to be afraid. Very afraid.”

According to Adrian Ash, former head of editorial at Fleet Street Publications and correspondent for the Daily Reckoning, “We can thank the world’s central bankers for this pretty pass in financial affairs. Cutting interest rates below inflation, Bernanke & Co. believe they’re somehow going to help both workers and business. Quite how remains unclear; devaluing money so no one can trust it seems an odd way to fix the economy.”

Even billionaire George Soros, probably one of the world’s most successful living investors, says the world faces an economic crisis unparalleled in the last 60 years. “The situation is much more serious than any other financial crisis since the end of World War ii,” he said. “We really do have a serious financial crisis now.”

When Soros speaks, the economic world listens. He is known as “the man who broke the Bank of England,” and has been accused of bringing down the Malaysian currency through his trading activities; for similar reasons, Thailand has labeled him an “economic war criminal.”

In Bob Moriarty’s opinion: “We have entered the Domino Depression; it’s not a recession. There also is no way of preventing it. Every day some bank or a couple of hedge funds will be announcing more massive losses until $516.4 trillion worth of fraud has been accounted for. It will be one domino, then another, until you think it has gone on for a century.”

Bill Bonner, author and founder of the Daily Reckoning,says, “So far, the losses reported on Wall Street are staggering. But rumors of much larger losses are being whispered … and at least one source we read suggested that the firms may be bankrupt … crushed by total system-wide losses of more than $3 trillion.”

According to these experts, the world’s economy is teetering on the edge, which is why international stock markets are dropping multiple percentage points for days in a row, America’s largest banks are seeking bailouts from foreign governments to stay afloat, and gold has reached new heights.

Meanwhile, over the past year, the mass media and tv economists have been telling us that everything is hunky-dory: The collapsing housing market isn’t big enough to matter; the falling dollar is good for America; the banking sector is the buy of the century; the Federal Reserve and U.S. politicians have everything under control; and America will probably avoid even a slight recession.

“The coming crash will plainly expose these conflicts of interest, and the reaction will be severe,” says Schiff.

The media, rather than motivating people to action—at a time when America could be nearing the worst crisis it has faced—have been lulling people to sleep.

Maybe it is time we got off the mass media’s Yellow Brick Road, clicked our heels three times and reminded ourselves of the reality on the ground.

Despite the conflicting expert opinion and mass media news reports, the reality is that the economy has already slowed down—and in the future it is going to get much worse.

For information on why theTrumpet.com can make such an absolute statement, and why its accuracy so greatly exceeds mass media and other expert commentary, read “What Is News?”, “Behind Our Spin,” and “What You Don’t Get on Broadcast News!”

For information on how to get your finances under control, read “Storm-Proof Your Financial House.”