What do you mean that wasn't what you said? Who were the "people" to which you referred in the final line if the antecedent be not, or include not, the gov't activities from the previous line?

Previous quote:

The proposals for bailouts, regulations and government spending sprees all share one tragic flaw....

You said:

... they share the assumption that such a limit has not been reached.

It is worth noting that the opposite has been true many many times over hundreds of years (that people assume such limits have been reached) and has always been wrong.

Not that the nuances of interpretation much matter.

The belief structure of the late 70's and early 80's was in perhaps correct, in that higher efficiency use, domestic control, and domestic sourcing of energy was paramount, and subsequent beliefs that cheap imported oil and products funded by international debt could somehow be sustainable were erroneous. Being 20 years too early in calling the peak might have been considerably better than now being a few years too late.

I would assert this: the US would be in a much more tenable and stable position now if trade imbalances and energy imbalances had never been allowed to balloon. Continuing down the path of the late 70's would have led to a better long-term future, while the path taken instead led to a hollowly prosperous boom period. Rarely does a man or a nation much suffer from living too fiscally conservatively.