Money growing on trees

As I sit and read, day after day, about government "bailouts" and "infusions" of money into various industries (today's suggestion of US Automakers being particularly near and dear to my icy heart) I can't help but look to the last significant depression we had in this country. It all started with the UK going off "the gold standard", essentially giving themselves the opportunity to print money, value be damned, to do exactly what we're now doing. This led to panic throughout the banking systems of the world, the implosion of credit markets, and what became (through more "infusions" of cash into markets both abroad and at home) The Great Depression. But I can't help but wonder what is different. We're seeing deflation - which really hasn't been seen since the Depression era across an entire spectrum of our economy. We're also printing money, which will inevitably lead to inflation, which we're all promising to pay back. Now, is it possible the deflation now, during a recession/depression will be offset by inflation when all this money hits the streets? Sure, I guess so. But is it also possible that with the deflation we see now, which leads to "holding cash" as a solution, will turn even uglier when the money hits the streets and our currency becomes almost worthless (see "1980's Japanese economy" for reference)? I just don't get it. And to top it all off, we're LOWERING interest rates. Let me get this straight. The banks claim they don't have enough cash. The government is printing cash to give them. We're lowering interest rates to get the banks to give away more money (this, in theory, is to "stimulate" spending so the economy recovers). Wouldn't it make a LOT more sense to go the way Hungary chose to do today and increase interest rates, so more people invest their cash rather than sitting on it? Wouldn't that then increase the cashflow of banks, allowing them to lend money, at higher rates, to those who truly need it to run businesses while simultaneously stimulating the economy by giving banks a higher return on their "riskier" lending practice (as opposed to the situation now where banks don't want to lend anyone money, even if you're 800+ credit score)? Am I insane, or are all these guys way overthinking Economics 101? Anyone out there have a better insight than me, because everything I read tells me we're doing it 100% the wrong way, and my gut tells me we're doing it because the idiots who got us into this in the first place are pulling all the strings...