If you destroy a firm, you can't pull it out of bankruptcy overnight.

The important lesson of the deficit is - and the national debt - is we have to be careful about how we're spending money.

Negative effects on the economy were covered up with a flood of liquidity from the Fed. That,plus lax regulation, led to a housing bubble, a consumption boom - but we were living on borrowed money. It was inevitable that there would be a day of reckoning, and it has now come. We will be paying the costs "with interest".

The problem is a lot of what is called economics is not economics. It is more ideology or religion.

I don't think if we had been able to make that choice rationally, we would have said that's what we want to do. We would have said: "Can't we save the banks and solve our health care problems?" The answer is yes. You could have.

Anybody who has watched government from the inside recognizes that governments need institutions, need ways to respond to crises.

The recovery of the banks is what happens when you reduce competition, lend money to them at zero interest rates, allow them to gamble. That particular style of restoration actually inhibits the economic recovery.