One of the first things that Democrats did when they took over things on Capitol Hill was to reinstate pay-as-you-go budgeting rules, under which new spending or tax cuts would have to be offset by spending cuts or tax increases elsewhere.

Speaking personally, that makes a lot of sense to me. While there may be some merit to the argument that it helps the economy when people get to keep more of what they earn, there is also the small matter of requiring people to pay for the services they use — even when those services are provided by the federal government.

Of course, being required to pay for what you buy when you buy it will be a new experience for this President. It'll be interesting to see how he handles it.

But, given the current fiscal situation, the new rules place a lot of responsibility on Congress to be frugal stewards of the federal coffers and to do their mite to avoid making idiotic investments.

Which brings me to an interesting piece of information that crossed my desk recently.

A study published late last year in the Journal of Finance found that government bailouts of "politically connected" corporations are poor investments.

The researchers looked at 458 politically connected firms (wonder if Halliburton was one of them?), along with a set of matching peer firms, over a six year period. They found fifty-one bailouts of those politically connected firms — including those with indirect connections as well as those with close relationships — which was nearly three times the number of bailouts provided for non-connected firms.

What's more, a number of those politically connected companies benefited from federal assistance more than once in the six year period. Sounds like a pretty poor ROI to me.

As you might expect, this information raises a number of questions in my head.

While it makes sense to me for the government to make investments in the U.S. economy, I wonder what possessed them to make bad investments into companies that are already in trouble, just because the CEO plays golf with the chief of staff?

Then, too, the press release doesn't mention how much money was involved. I wonder, if that money had been used to augment the SBA budget instead, how many more jobs could have been created and how much additional tax revenue would have been generated by the small businesses that could have gotten more and better services?

But the big question is this: if the incoming Democratic majority will be forced by their budget rules not to spend money like they're stupid, will they take a look at their investment options and make better choices?

Or will it, indeed, be business as usual?