By Bob Barr
The leaders of both the Republican and Democratic Parties are rushing ahead with their $700 billion bill.
Without a single hearing and without considering other solutions, Congress is preparing to put the typical American family on the hook for more than $8,000. Legislators in both parties need to stand up for the American people and say no.
If bailouts are the answer, why hasn’t the $300 billion housing bailout worked? What of the $100 or more billion bailout of Freddie Mac and Fannie Mae? This bailout package doesn’t resolve the underlying problems. It merely transfers the liabilities to the taxpayers. Instead, we need to make Wall Street take the hit for its irresponsible investment decisions.
The process will be painful. Some companies will go bankrupt. Some firms will go into receivership. Healthy companies will take over failing institutions.
Instead of bailing-out banks and investors, Congress should address the causes of today’s economic mess. The first is to end government pressure for irresponsible lending. That means privatizing Fannie Mae and Freddie Mac and repealing the Community Reinvestment Act. It also means depoliticizing the nation’s money supply. The Federal Reserve cannot continue artificially inflating the money supply, which creates the illusion of a boom that is inevitably followed by a bust.
The government needs to investigate and prosecute fraud. It also needs to adjust accounting rules, such as “mark-to-market,” which threaten the balance sheets of sound companies. We need to streamline complicated regulations that have not created transparency for customers and investors. And we need to look at any rules that make it harder for companies to make the necessary adjustments themselves.
The bailout bill is not only bad because it forces innocent taxpayers to pay off irresponsible bankers and investors, but because the bill creates an excuse for more extensive federal economic meddling—setting corporate salaries, receiving stock in companies, and “adjusting” mortgage terms. Once the government gets into these areas of the economy, it isn’t likely to get out.
We must force the federal government to get its fiscal house in order. The national debt already is $9.5 trillion. Social Security and Medicare currently threaten us with $100 trillion in unfunded liabilities. Just where will this new $700 billion come from?
With the economic crisis upon us, painful adjustments are inevitable. Instead of bailing-out those who made the mess and slowing down the adjustment process, Congress needs to get out of the way. Its job is to fix government policies that have made things worse. The job of the American people is to replace those politicians who created the failed policies—and who today think the answer is to conscript the public’s money to pay off failed businessmen. Only by voting for Bob Barr and the Libertarian Party will the American people be voting for the change that is necessary.
Libertarian Party presidential candidate Bob Barr represented the 7th District of Georgia in the U. S. House of Representatives from 1995 to 2003.