Can the govt bail out and still give tax cuts?

It's no mistake.

The strategy the government is following was created in the 1960s by a right-wing thinktank, as a scorched-earth "solution" to FDR's stabilizing programs. Known as "starve the beast", the intention is to spend so massively while scaring average people into petty jealousy over how their taxes are being spent that these right-wing politicians can bankrupt the nation, and then publicly shrug their shoulders while saying "well, what can we do? our hands are tied. we have to eliminate all safety-net programs, all publicly-funded infrastructure programs, etc. etc.

Fortunately, they've gotten a lot of "crony-capitalism" out of it in the meantime.

"Reagan proved deficits don't matter" - Dick Cheney

Bail out, 1 trillion more for Iraq war and tax cuts. Seems like an odd combo.