NEW YORK ( TheStreet) -- Omaha hosted two of the most influential players of the recent financial crisis this week. Hometown hero Warren Buffett sat down with former Treasury Secretary Hank Paulson to discuss Paulson's new book, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, at the annual meeting of the Greater Omaha Chamber of Commerce. During the nearly hour-long discussion, Buffett and Paulson touched on a number of topics concerning not only the book but Paulson's personal life as well. However, what seemed to gain the most media attention was the discussion geared towards the actions taken by Washington to combat the financial meltdown. Though the two men have not always taken the same stance on political issues, when discussion centered on the government's bailout of the U.S. financial crisis in 2008, both enthusiastically voiced their support. Buffett's approval of the government's decision to inject $700 billion into the U.S. economy once again brings to mind an interesting contradiction concerning the Oracle's views on debt. While Buffett commends the government's actions in the time of crisis, he has traditionally been opposed to increasing government deficits. These concerns were highlighted in a New York Times op-ed he wrote last August. In the piece, Buffett explained that if the government continues to issue excessive quantities of "greenback emissions" into the economy, the U.S. will lose its financial integrity. Despite Buffett's apparent contradiction, highlighted by his views on the bailout and our growing deficit, his approval of the actions taken to save the U.S. financial system from collapse is hardly surprising.
After all, for Buffett, benefits of the bailout are direct, while the costs are indirect or borne by the public. When the U.S. financial system was teetering on the edge of collapse, Warren Buffett had a lot of chips on the table. Berkshire Hathaway's ( BRK.A) portfolio contains a large number of U.S. financial companies, including Wells Fargo ( WFC), US Bancorp ( USB) and American Express ( AXP). Additionally, prior to the government bailout, Buffett decided to make a large bet on Goldman Sachs ( GS) whose future at the time was uncertain. Buffett needed the government bailout to ensure that all of these companies could weather the economic storm. Luckily for the investor, not only did the injection of funds help all of his firms survive, but with victims of the collapse like Lehman Brothers, Bear Stearns and Merrill Lynch out of the picture, Buffett-backed Goldman Sachs was able to take up the uncontested throne as the king of Wall Street. In return, Goldman, Buffett, and Berkshire Hathaway have been able to pocket billions. When it comes to the government bailout of the financial system, Buffett can't help but find himself torn. While the injection of funds raises concerns about rising debt, the investor would have broken his number one rule, "don't lose money," if no action had been taken. In the end, given the losses that were at stake and the profits earned as a result of the government's bailout, it is no wonder that Buffett supported it. -- Written by Don Dion in Williamstown, Mass.