"Bail out," as currently used, connotes helping an undeserving person or company. The Post's editorial page has used this term when discussing the All Savers Certificate authority of the savings and loan industry, indicating that the federal government is bailing out the S&Ls. This is not surprising; the editorial page is made up of opinions on subjects about which the writer may or may not know much.

But when a writer such as Hobart Rowen on the op-ed page, a star among stars, uses this term to describe the granting of the All Savers authority, it is surprising. We readers expect him to know his subject.

The savings and loan industry is in trouble, not because of mismanagement and poor performance, but because we were too good at our job. We served as an arm of the federal government to implement a social policy--that of providing housing for the mass of people. We did this so well that the industry now owns close to $600 billion worth of long-term mortgages with an average yield between 9 and 10 percent. This was made possible by federal regulations that held the interest paid on savings to a low rate. And the government guaranteed these savings, which in essence are secured by this $600 billion in loans.

If these loans were sold on today's market to pay off the depositors, there would be perhaps a $200 billion shortfall that the government would be responsible for through its insurance of deposits. With the government's liability for this shortfall approaching the payoff stage because high interest rates and deregulation are destroying the S&L industry, who is being bailed out? Not the industry--we are not responsible for the mess. The government is bailing itself out. It will have to meet its insurance obligations one way or the other, and if it cannot do that with intelligent policies, it will have to use "tax expenditures" or, as a last resort, direct appropriations, which will make the Chrysler affair look piddling.