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What the government is doing is not bailing out these companies. The government is in effect acquiring these companies in order to sell off their assets.

As for supply-siders saying deficits don't matter, you are wrong. It is actually more of a Keynesian approach to run long-term large deficits. In truth, there is no great sin in running budget deficits as long as the debt service ratio is not too great. Remember, many successful corporations operate with long-term debt. Debt is cheaper than equity, so it makes sense to operate on a deficit as long as the debt can be serviced.



I disagree with most of what you said here. The government did not buy AIG and will receive no return on that money. Selling off assets is not how I would characterize any of the bailouts this year. Supply side economics is the corner stone of Republican policy since Reagan. Hence the elder Bush's famous "voodoo economics" quote. (I can't hear that without thinking of Ferris Bueller)

And lastly, I don't think any economist was thinking of debts this large when they developed their theory.

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Honestly, I don't know...I'm torn. We haven't talked since AVN (other than the hearing in February)- Eric on Bree Olson