OK, this is our last word on the California recall. What a blast! Say what you want about Arnold Schwarzenegger and the recall process. Even say what you want about wacky California politics. But if we walk away with anything from this exercise, it should be this: It really is (without calling anything stupid) the economy.

Whether it's the floor of the New York Stock Exchange -- where we will soon learn how much some of Dick Grasso's former colleagues take home -- to the most productive state in the Union, nothing engages Americans like fiscal mismanagement. At least not the Foolish ones.

In today's Motley Fool Take:

Yahoo!'s Honeymoon Begins

The days of typing O-V-E-R to grab a stock quote for Overture? They are O-V-E-R. Yahoo!(Nasdaq: YHOO) completed its acquisition of the text-ad pioneer last night, sending Overture stockholders 0.6108 shares along with $4.75 in cash for each of their old Overture shares.

The ceremony may have been more of a shotgun wedding; after all, Overture was starting to account for a disturbing amount of Yahoo!'s bottom line. Pay-per-click searches, where advertisers bid on how much they are willing to pay for relevant search-related traffic, has become big business. It has practically single-handedly revived the hopes of high traffic, content-enabled Internet destinations.

But after watching Microsoft(Nasdaq: MSFT) give LookSmart(Nasdaq: LOOK)the heave-ho yesterday, one has to wonder if a Yahoo!-owned Overture will be able to maintain its working relationships with others like Terra's(Nasdaq: TRLY) Lycos and Time Warner's(NYSE: AOL) CNN.com. The conflicts of interest might be too great for these companies to further pad the bankrolls of rival Yahoo!

In fact, about the only real estate Yahoo! is assured of securing in terms of providing targeted text ads through Overture is its own, plus Overture's dowry of AltaVista and AllTheWeb.com.

Distribution matters. That's why, when the market slammed Overture for its acquisition of AltaVista back in February, we applauded it. The Overture shares retired last night had appreciated 57% since the AltaVista purchase was first revealed.

So while Overture may be a vital piece in the Yahoo! jigsaw puzzle, Overture also gets a sugar daddy in terms of distribution. The nuptials may have been rushed, but there's no reason not to believe that these two will be living happily ever dot-com after.

Quote of Note

"Once you can accept the universe as matter expanding into nothing that is something, wearing stripes with plaid comes easy. " -- Albert Einstein

Costco's Comeback

Today's results from warehouse giant Costco(Nasdaq: COST) offer a pretty fair view of the company as it stands today -- still strong and growing, but facing competitive challenges against which management will struggle to keep the company in the catbird seat.

But investors, to their credit, are far from giving up on Costco, despite the oft-reported increased worker's compensation costs and competition from Wal-Mart's(NYSE: WMT) Sam's Club. The latter, clearly, is pressuring margins as the world's leading retailer looks to scale its way to price leadership.

Moreover, Costco will struggle to boost profit margins if its chief competitor is slashing prices -- and that's not to mention recent efforts from BJ's Wholesale Club(NYSE: BJ). All these themes are being discussed as investors look for signs of Costco's competitive direction. At least this year, the shares have rolled back upward following its August earnings surprise.

Some indications are positive. While fiscal fourth-quarter and full-year net income fell year over year, same-store sales were up and gross margins held fast. (In its financial filings, Costco counts only net revenue, removing membership fees, thus actually lowering its gross margins.) What's more, net sales grew more quickly than merchandise costs for the third straight year.

In this business, it seems the best defense may be a good offense. With that in mind, Costco continues to expand aggressively. Another 16 or 17 warehouses (including two relocations) are scheduled to open by the end of the year.

New stores will boost the top line, obviously, but also presumably help in the battle for gross profits as the company's scale increases. Costco has generated ample free cash flow through the first three quarters, so further investments should not be a problem for Costco.

Discussion Board of the Day: Yum! Brands

Have you tried Yum's Tasty Numbers? Let's rephrase that. Have you tried the new and improved Popcorn Chicken at KFC? What about that spicy chicken burrito at Taco Bell? Can Pizza Hut keep pace with its nimbler pizza rivals? All this and more -- in the Yum! Brands discussion board. Only on Fool.com.

Not yet a member of the Fool Community? Jump into our discussion boards free for 30 days!

We Owe, We Owe

Baseball, apple pie, and debt -- it doesn't get more American than that.

On Tuesday, the Federal Reserve announced that U.S. consumer credit grew $8.2 billion in August to a seasonally adjusted $1.956 trillion. That's on top of 4.3% growth in 2002 and 7.3% in 2001.

Of course, it's not big news that we're a country of debtors. And it's not exactly discouraged. After all, more than two-thirds of the country's economic activity comes from consumers. It's almost unpatriotic not to spend, spend, spend.

That's what the government's doing, borrowing trillions of dollars with the expectation that, one day, its ship will come in. According to The Denver Post, in one year the total national debt (including what the government owes itself and the public) swelled to $6.81 trillion from $6.23 trillion. That's more than $23,000 for each American.

Surely, this can't go on forever. People have already begun talking about a credit "bubble," where we -- individually and as a country -- owe so much that our debt-buoyed economy collapses. A CNN/Money article points out that, as a percentage of disposable income, consumer credit and mortgage debt have never been higher. At some point, many consumers won't be able to pay their bills. In fact, CardWeb.com reports that credit card and home equity loan delinquencies rose in the second quarter.

It's a national conundrum, but the solution begins at home. After all, dear reader, you don't have much control over how your neighbor or your president spends money. (Unless you are the president, in which case permit me to request that you hunt down corporate wrongdoers with the same fervor that you pursue terrorists. I would have no qualms if you sent Ken Lay and Bernie Ebbers to Guantanamo Bay.)

But you do have control over how you allocate your resources. So perform this little exercise: Examine your most recent credit card statement. Look at each purchase, then ask yourself this: What did I get from that purchase? Was that dress/tool/meal something I truly enjoyed, or was it something that will be seldom used or enjoyed, relegated to my closet/garage/thighs?

Surely, with so much consumption -- funded by more and more debt -- there must be diminishing returns. We're not talking self-denial necessarily; just an awareness that a "buyer's high" is fleeting, but thousands of dollars on a credit card that charges 18% a year can be forever.

Shameless Plug: Motley Fool Credit Center

For more on the wild world of credit -- including how to use it wisely -- visit The Motley Fool Credit Center. (We always love a perfect segue.)

More Fool News

For a list of all our stories from today, see Today's Headlines.

And Finally...

Dayana Yochim pays homage to Franco Modigliani, the economist who taught us the art of saving. We Fools salute you, Mr. Modigliani.

We're also doing some digging around on Fool.com today. First, is Talk America The Next Telecom Double? Tom Gardner uncovers this hidden gem. Then, Rex Moore, distracted momentarily from his hymnal at church, started undressing Slurpees, 7-Eleven, and same-store sales. (He rarely does this, we assure you.)

Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, Jeff Hwang, LouAnn Lofton, Alyce Lomax, Bill Mann, Selena Maranjian, Dave Marino-Nachison, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim