Don't read this post if you want to believe the government's assurances that the economy's turning around and all will soon be right with the world.

Lynn Tilton, CEO of private-equity fund Patriarch Partners, is here to tell you that things aren't nearly as rosy as Washington would like us to think. The problem is banks' failure to lend money to small and midsize businesses. "We're losing industry in this country every day--which means we're losing jobs--because they have no access to capital," she says. And that means permanent job losses for the men and women who were employed by those companies.

Concerned that American industry is in dire straits, Tilton created SMERescueLoans.com, dedicated to saving jobs in America by making loans to small and midsize enterprises. The Rescue Loans program is designed to take advantage of TARP funding intended for the Public Private Investment Partnership, in combination with private investment. That way, if there's a loss, the private investors will absorb it first, reducing taxpayer risk. Tilton says more than $100 billion in PPIP funds aren't being used. She hopes to use $30 billion of that total.

SME Rescue Loans extends the reach of Patriarch Partners. "What we do for a living here is, we try to save companies that other people would toss away, and we try to save jobs in America," Tilton says. "We've always done that since we started the business. It was always about proving that making money and making the world a better place were not mutually exclusive options."

But Tilton says her company can't solve the crisis on its own. That's why she created RescueLoans. It's also why she--a woman who usually stays under the radar--is speaking out in public about the problem: "I can't do this alone. I'm speaking out because I need help. I need other people to see it. I need other people to care.

"If people begin to support this and say, 'hey, we have a problem and we need a solution,' that's when Washington will respond,"she says.

Meanwhile, Tilton's been talking to senators and members of Congress in Washington and taking meetings with representatives from the Treasury Department to jumpstart RescueLoans. "We're really trying to get Washington to jump on the bandwagon. We'd like Treasury to take [the RescueLoans program] and set it up and try to get private investors that they will help finance and leverage to move forward."

Tilton has seen up-close the effects the economy is having on middle America. Her company has investments in 73 companies, many of them manufacturers. "I spend a lot of time out with my people," she says. "People are suffering. Outside [of Washington] in middle America, you're finding unemployment rates well above 20 percent."

According to Tilton, the kind of loans industry used to have--basic capital loans that allowed companies to finance the timing between buying materials and getting paid for the product they make--aren't available right now. And without everyday working capital loans, "These companies have no chance for existence," Tilton says.

Tilton's even looking into acquiring financial institutions to bring relationship lending back to American business.

Industry is where the largest number of losses are occurring, Tilton says. "Unless we've made the decision that we don't need to be the maker of things ... then we're making a huge mistake. Not to mention that if we've decided that we don't need to be the maker of things, we've made even a bigger mistake. Because every great empire has been built upon the manufacturing economy. And the fall of every great empire has been the failure to remember that fundamental fact."

Tilton points out the irony of government funding: "We can go to Washington and get money from the IFC [International Finance Corp.] or OPEC to go build manufacturing facilities on the other side of the world to create a developing economy and put people to work so they can make money and provide for their families with dignity," she says. "But you couldn't get money from the government to save companies and provide jobs for Americans."

Tilton says America can't sit around waiting for banks to begin lending again. "It's too late. Most of these companies are already in deep distress by not having had access to capital, and everybody's lost revenue. So if you've had no access to capital, chances are you're not going to survive.

"What people don't realize is, a lot of these jobs have been lost forever. Day after day our industry in America is liquidating. And so there's no place to hire back."