US Rep. Sue Myrick on the Credit Market Crisis:
The credit market crisis affects you, probably more than you can imagine. For that reason I spent several days last week talking with local business people – many I have known twenty to thirty years. Their businesses are solid. Yet their credit was frozen, causing them to say they would have to lay off employees. That could mean massive unemployment in our area. Most businesses use short-term loans for cash flow, buying equipment, renovations, etc. That's the way business works. They know they have the income from contracts or sales to pay it off. Mecklenburg County's debt service is also escalating, causing them to have to make hard decisions.
One car dealer told me that two thirds of all the people who applied for a car loan on his lot last week were denied, even though they had excellent credit. A textile mill in Kings Mountain closed, citing unavailable credit.
Voting for a bill I hate was the hardest decision of my life, worse than agreeing to undergo chemotherapy and radiation when I had breast cancer, with no guarantee it would work. It was the same with that bill.
One was a personal decision that affected one person – me. The bad bill affected 300+ million people. I could not risk doing nothing. We were simply out of time. According to one of my most trusted financial advisers, we're seeing decades of history happening in weeks.
I talked with an economist who works with business people all over the country, and he told me he's never seen such fear in their eyes – except when he was in the World Trade Center on 9/11.
People wonder how that bill will help them. Well, the loans the government will buy do have value – homes – behind them. Once the economy stabilizes and home values stop falling, those loans will be sold and the money will go toward our country's debt.
There are checks and balances on the money. $250 billion to start and that will be monitored before the additional funds can be used. It's not a blank check.
By voting no the first time, we forced the Securities and Exchange Commission to change the accounting rules so the loans can be listed at fair value.
Also, the FDIC insurance limits are raised from $100,000 to $250,000, which helps small businesses and individuals. It also included some other tax provisions to benefit you.
I believe in doing what is right for you and for our country.
There is a credit crisis. Either you believe that fact or you don't. I do.
I'm old enough to remember the effects of the Great Depression. Make no doubt about it, if the credit markets do freeze up, commerce will grind to a halt. Not a slow down... but a complete freeze. That action would lead to a deep recession – possibly depression - and I felt it had to be avoided.