Today's Outrage: Here Come the Bankruptcies

It's official: The holiday season was a disaster, especially for many smaller, regional retailers.

While the U.S. government squanders $700 billion to "help" major banks such as Citigroup(C) and Bank of America(BAC) and now automakers such as General Motors (GM) and its financing arm GMAC, the real engine of the economy is allowed to sputter and choke.

I'm talking about small businesses, which the U.S. Small Business Administration says employ more than half of the private sector workforce.

We hit the tip of the iceberg with the recent bankruptcies of eToys owner Parent Co.(KIDS), Circuit City(CC) and Chesapeake Corp.(CSK).

Among smaller companies on analysts' watch lists are are struggling regional department store Bon-Ton Stores(BONT)., of York, Pa., and apparel retailer Goody's Family Clothing, which filed for bankruptcy protection in June but emerged from Chapter 11 in October.

There will be more. A lot more. And we should be a much more worried about the implications of a potential small business meltdown.

That's how a recession turns into a depression.