Tuesday, December 9, 2008

Bailouts

Imagine that a bunch of alcoholics sit around every day drinking at a bar, and two people come in alleging to want to help.

The first guy tells them that in order to recover, they must go home, stop drinking, experience the hangover, and go through a rehab process that will be difficult but reassures them that in the long run, they will all be better off. They other guy sympathizes with them knowing that hangovers hurt and that rehab is life altering and painful. So, he offers to buy them some more beer. (update: this is wrong - I should have said "he offers to force other people in the bar to buy them more beer".)

Which approach is better, and does the offer of more beer constitute a "bailout"?

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