Last week, we got a glimpse at the estimated cost of President-elect Obama's stimulus plan aimed at righting the economy: It'll be between $675 billion and $775 billion over two years, a bit less than the trillion dollars some had expected.

Will any of it work? Perhaps, but don't get your hopes too high. It's safe to say the stimulus package earlier this year achieved precisely nothing. As Ludwig von Mises once said: "The government creates [money] out of nothing … which can be exchanged against any merchandise a man would like to get. How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's Treasury Department?!" So true, but, heck, we're still gonna give it another whirl and see what happens.

The logic behind such a massive stimulus is that the government should substitute for the plunge in consumer spending. The hope is that the cost of the bailout will be less than the cost of letting things work themselves out on their own -- which, in fairness, it probably is.

Already, infrastructure companies such as Cemex (NYSE:CX), Jacobs Engineering (NYSE:JEC), and even Caterpillar (NYSE:CAT) have surged on the anticipation of fat government contracts that could put millions of people back to work.

It's raining cash!
Still, these stimulus packages always trip over a fundamental point: If $775 billion will help, why stop there? Why not $1 trillion? $2 trillion? $100 zillion?

The answer's pretty easy, and it was summed up nicely in The Wall Street Journal: "Obama aides hope to keep the package below the trillion-dollar mark … as they fear being accused of adding too much to the country's long-term budget deficit."

Drats, that's right … we actually have to pay for this stuff someday.  Already going for broke (literally) by bailing out General Motors (NYSE:GM) and Ford (NYSE:F) and up to its ears keeping banks such as Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C) from collapsing, Uncle Sam is flirting with some of the highest debt/GDP levels in decades. Have a look yourself:

Year

National Debt/GDP

Inflation

1950

94.1%

1.09%

1955

69.5%

(0.28%)

1960

56.1%

1.46%

1965

46.9%

1.59%

1970

37.6%

5.84%

1975

34.7%

9.20%

1980

33.3%

13.59%

1985

43.9%

3.55%

1990

55.9%

5.39%

1995

67.2%

2.81%

2000

58.0%

3.38%

2005

64.3%

3.39%

Today

73.1%

Currently deflating.

Even before the impending stimulus, our debt/GDP ratio is about as high as it's ever been post-World War II. If government runs a $2 trillion fiscal deficit in 2009 as expected, the debt/GDP ratio could start to flirt with 100% -- a number only reached in the three years following WW II, reflecting the cost of the war.

But, hey, who says a 100% debt/GDP ratio is too high? After all, Japan runs a 170% ratio like it's no one's business. Plus, the big worry about racking up too much debt is that it will usher in inflation. Yet looking at the table above, the exact opposite appears to be true. So everything's cool … right?

Ha … ha … ha
Sadly, no. The difference between us and Japan is that Japan is the world's largest creditor nation, while we're the world's largest debtor nation. Same goes for comparing the U.S. of today with the U.S. of yesteryear: When debt/GDP levels were sky-high after WW II, the U.S. was still the world's largest creditor nation.

Today? Not so much. Treasury rates are insanely low right now because there's a panic-induced rush to safety. Yet as we've seen so vividly this year, what seems bulletproof and unshakable one day can unravel with a vengeance the next. Does $150 oil ring a bell? A prickly fact that I'm sure makes Hank Paulson sweat bullets is that we're reliant on other countries' money at a time when those countries need to take care of themselves.

Take China's recent stimulus package. It'll provide $586 billion to prop up its economy, which is $586 billion that may have otherwise been plowed into U.S. Treasuries, as had been the norm in the past. And now that our interest rates are actually lower than Japan's, the "yen carry trade" that pumped so much money into our economy could start to spin in reverse. Same goes with cash-rich OPEC nations: With crude down more than 75% in just a few months, they surely don't have nearly as much free cash to plow back into our economy. Ditto for Russia. When global economies unravel, it's every one of us for ourselves -- and that's a daunting position for the U.S., which relies on the financial kindness of others.                                                                                                                

That's probably why Obama is trying to keep the upcoming stimulus package in check -- as much as $775 billion qualifies as "in check," anyway. Rather than come out swinging with a trillion-dollar stimulus that might push international confidence in the dollar to a tipping point, it's probably wise for politicians to remember that someone, someday, will eventually have to pay for every penny of these giveaways.   

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Cemex is a Motley Fool Global Gains and Motley Fool Stock Advisor pick. The Fool owns shares of Cemex and has a disclosure policy.