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The Economy
Recently, President Bush and Secretary of the Treasury Henry Paulson have pressed Congress to act quickly on a $700 billion plan for the nation's financial system. So far steps to reduce the impact to our markets by bailing out large firms such as Bear Stearns, Fannie Mae, Freddie Mac, and American International Group (AIG) have done little to repress the instability in the financial system.
As it currently exists, Secretary Paulson's plan is to buy investment banks' mortgage backed securities at inflated prices. Under his plan, Congress would be rewarding banks for their poor decisions without first discussing serious alternatives. The Secretary of the Treasury should not have the authority to spend $700 billion in taxpayer money without oversight and without limits on executive compensation. Additionally, socializing risks and privatizing profits sends the wrong message to banks that would be encouraged to act more irresponsibly in the future, knowing that the federal government would come to rescue them if they got in trouble.
I do not believe we should be using taxpayer money to save private sector companies from the consequences of their poor economic decisions. Details of the plan are still being worked out after House hearings and meetings with the administration, but the latest proposal gives me great cause for concern. Taxpayers deserve answers and accountability. So far, I have seen neither. I hope we can come together and find a better solution. This is about saddling our children and grandchildren with $700 billion in additional debt. I have to believe that there is a better way forward.
View the Alternative Plan I support.
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