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News and Views |
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Congressman
Lewis’s Floor Statement on Economic Stabilization Legislation Mr.
Speaker, there is a sense of urgency in the Capitol. We all know that this
urgency is real: we have seen the largest U.S. bank failure in history, the
demise of century-old Wall Street firms, and a nearly total freeze of our credit
system. Everyone,
Republican and Democrat, is keenly aware that our economy is in dire straits. It
seems increasingly clear that unless we in Congress allow the federal government
to take bold steps, we are facing a serious recession or worse. Treasury
chief Henry Paulson – backed by President Bush – has laid out a plan that
would commit $700 billion to relieve the pressure on the credit system by buying
bad mortgage debts and other “toxic assets.” The
American people are rightly furious that their tax dollars will go to
“reward” the businesses and business people who they believe got us into
this mess. Most who have called my office forcefully said “I’ve paid my
bills, I shouldn’t have to pay their bills, too.” Frankly,
I’m furious, too. The idea of spending taxpayer dollars to prop up risky
investments keeps me awake at night. It goes against all the principles I have
lived by – personal responsibility, smaller government, reliance on the free
market. But
we cannot afford to simply look at this as angry taxpayers who believe we should
just let the greedy gamblers fail. The stakes are too great for that. Uncle
Sam has been involved in controversial bailouts before. There was the
bailout of Chrysler in the 80’s and later of Earlier
this week Chairman Bernanke reminded us that Wall Street is an abstraction.
The internal credit markets that allow banks to borrow money from each other are
hard to understand for our constituents – and for most of us, as well. I have
heard constituents – and some members – say we shouldn’t worry about the
lack of credit between banks. But
the failure of our credit system has broad implications, not only for the high
rollers in When
local business owners do not have cash today for payroll but know they will in
the future, they can turn to their bank and get a short term loan to pay their
employees, stay open and help build the local economy. When
families do not have cash to buy a home or a car, they turn to their bank to get
a mortgage, create wealth and help build the local economy. When
high school students do not have cash to pay for college, they turn to their
bank to get a student loan. When those students graduate, they enter the
workforce and help build the local economy. When
banks stop lending between themselves, they soon stop lending to everyone else
and economic expansion at the local level stops. The crisis on Wall Street
becomes the crisis on The
liquidity crisis is a linchpin of the broader economic crisis facing our
constituents. This crisis has already hit our seniors in retirement and
those looking at retirement. Even savvy retirement age constituents who
made sound investment choices are not immune to our current market downturn.
Should we refuse to act swiftly, those who rely on investment income and do not
have the luxury of time to wait for long term market adjustments will have even
less money for food, housing and medical needs. In
my own district and yours, we are seeing clear signs that a downturn in the
financial markets impacts city and county investments and puts important public
projects at risk. Can we afford to increase that risk to local
growth? There
is no question that investing in the market also poses risks, but if we can
reduce market uncertainty, those risks are reduced for everyone. That is the
only way to protect the investments made by seniors who built our economy’s
foundation and localities serving our constituents. Allowing
the markets to crash and leaving Wall Street to its own devices does punish the
decision makers who fueled this crisis. But we all know it won’t stop
there. Millions of Americans will suffer the consequences, even those who
felt they were being careful with their retirement nest egg. There
is no question that we in Congress must move deliberately and do everything we
can to reduce or eliminate the risk to taxpayer funds. And whatever action is
taken by Congress, we must make certain that those who got us into this mess do
not profit further from the solutions we develop. But
we cannot avoid risk. Ultimately, we must face the realization that doing
nothing will cause a potential catastrophe, and the suffering won’t be felt
just on Wall Street. It will be on every Click Here to Return to News & Views
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