WASHINGTON -- JPMorgan CEO Jamie Dimon on Wednesday made the case that the government should step aside and allow big banks to fail when they mismanage their investments.

But Dimon's own bank, the biggest in the U.S., received a $25 billion taxpayer bailout in 2008. At least one Democratic senator said JPMorgan would have collapsed -- and Dimon would have been out of a job -- if the government hadn't come to its aid.

During testimony before the Senate Banking Committee, Dimon took questions for two hours relating to JPMorgan's loss of more than $2 billion on a recent trade. At one point, he was asked to reassure the committee that JP Morgan, which had $2.26 trillion in assets last year, could theoretically be dissolved without damaging the economy and without the aid of taxpayer money. Dimon responded that the bigger issue is that the government shouldn't consider any bank "too big to fail."

"We have to allow our big institutions to fail. It's part of the health of the system. We shouldn't prop them up," Dimon said. "You want to be in a position where a big bank can be allowed to fail. I wouldn’t call it resolution -- I think it's the wrong name -- I think it should be called bankruptcy. Personally, I call it bankruptcy for big dumb banks."

Sen. Jeff Merkley (D-Ore.) was the lone senator to challenge Dimon on the remark. Merkley pointed out that in addition to receiving $25 billion from the Troubled Asset Relief Program, JPMorgan benefited from a half-trillion dollars in low-cost loans and "untold billions" indirectly through the government bailout of insurance giant American International Group.

"With all of that in mind, wouldn't JPMorgan have gone down without the massive federal intervention ... in 2008 or 2009?" asked Merkley, co-author of the bill that created the Volcker rule that would limit speculative trading by big banks.

"I think you were misinformed," Dimon shot back, his voice rising as he spoke. "JPMorgan took TARP because we were asked to by the secretary of the treasury of the United States of America. ... We did not at that point need TARP. We were asked to because we were told ... to take this TARP and get it to all these other banks and stop the system from going down."

"We did not borrow from the Federal Reserve except when they asked us to," Dimon continued. "We would have been OK."

As the senator and the CEO talked over each other -- Merkley put an end to it by reminding Dimon that "this is not your hearing" -- Merkley said Dimon must simply disagree with all the analysts who say the bailout "enormously" benefited JPMorgan.

"Many analysts have reached the conclusion that if you had applied Old Testament justice in 2008, JPMorgan would have gone down, and you would have been out of a job," Merkley told Dimon.

"And it goes to the enormous frustration -- how many companies in the history of the planet have been offered half-a-trillion dollars in low-interest loans?" asked Merkley. "Not many."