I am convinced that space exploration is one of the best uses of public money and every dollar spent on it will directly and indirectly return, most likely with a fat profit. Thats even more true now when private companies are going to cut costs and increase efficiency of space exploration considerably, so partnering with them would make the bang for the public buck even better.
I think Moon is an ideal target. For the same money you can have either a limited flag and footprints mission on Mars, or a real colony on the Moon, and have it much sooner. It is high time to return to the Moon and this time, to stay. Mars should be considered when there is enough money, which probably will not happen in this economic situation any time soon.