September 29, 2008 – U.S. Congressman Trent Franks (AZ-02) gave the following statement today on the final agreement reached between House and Senate Leadership on the bill crafted in accordance with the “Paulson Plan” to bailout the financial sector:

“Giving the federal government the ability to nationalize almost every bad mortgage in America interrupts the foundational truth of our economy— that the American free enterprise system fundamentally depends on the ability to fail, as well as to succeed.  If we allow taxpayers to subsidize these current market failures caused by poor investment decisions, I believe we will only be sentencing ourselves and the American people to subsidize future failure at even greater cost, while perhaps irreversibly changing the relationship between the public and private sectors.

“Some proponents of this legislation have asserted that free markets are actually the problem and socializing our financial markets is the answer.  I could not possibly disagree more. 

“The truth is, the turmoil in our financial markets is rooted in the failed government policies in the mortgage industry, through government sponsored enterprises such as Fannie Mae and Freddie Mac, as well as in corrupt rating agencies who fueled false confidence in the stability of incredibly risky loans.  Continuing to artificially manipulate the housing market through government intervention and regulation will, I believe, ultimately only exacerbate the current situation.
 
“I believe that in the haste to address these failing industries, Congress has neglected to investigate or consider real alternatives that could address the need to inject capital into our financial markets without requiring this substantial outlay from the federal government via the American taxpayer.  The ultimate burden of these decisions will be borne by this generation of taxpayers, as well as by future generations.
 
“As difficult as the situation is that we face, I truly believe this bill is not the best answer to the challenge facing our country.  In the end, I cannot in good conscience support this legislation.”
 
“We can, and we absolutely must, find a better solution to stabilize our financial markets.”