Professor Edward Kane:

This question can be asked in so many ways I am not sure what the Senator is getting at. There is a sense in which I would say absolutely, the burden placed on taxpayers is enormous. The burdens on people in this country who took out mortgages they cannot pay are enormous. If we ask from the point of view of public policy, looking backwards, should this all have been guaranteed I would find it hard to find people who would say “Yes, that was really great policy”. The trouble is people had the authority and the pressures at the time to do those things. What is true is that the fiscal strength, the tax and debt capacity of a country, limits the value of its guarantees domestically and particularly for foreign creditors.