Wednesday, November 19, 2008

Garrett Bailout Op-Ed

Representative Scott Garrett published an interestingly sarcastic Op-Ed in the New Jersey Herald over the weekend. I don't have time to dissect this right now, but here it is for folks to read.

Bear Stearns bailout. Fannie Mae and Freddie Mac bailout. AIG bailout. $700 billion bailout. Auto industry bailout. Medicaid bailout. Where do the bailouts end? Depends. How much money can you, the taxpayer, afford to pay?

Every bailout is the government committing you the taxpayer to pay more money. Thought you were saving for your children's college fund? Nope. That money is going to save Detroit. Thought you were going to save up for a house? Nope. That money is going to help people who bought houses they couldn't afford in the first place.

I have fought against all of these rash bailout measures, calling on my colleagues to stand against this commitment of your money with little or no government oversight. With the support of many of my colleagues, I called on President Bush for an increase in transparency to provide the American people and Members of Congress insight into the decision-making process that yielded the $700 billion bailout plan. I also backed the bill that was introduced as the alternative to the $700 billion bailout, the Free Market Protection Act. This Act contained many efforts to fundamentally address the systemic issues affecting the financial markets while preserving free market principles.

Every year, the government goes through an appropriations process of determining how much money will be budgeted for spending over the next fiscal year. There are hearings, there are debates, and while there could always be more oversight, there is at least a degree of accountability for how we are allotting money to be spent in the federal budget.

With these bailouts, however, there is no oversight. There are no hearings. There's a degree of exigency that started with Bear Stearns ("Too big to fail!") that has carried over to every other bailout proposal ("We bailed out Bear Stearns, why not Fannie and Freddie?!"). As a result of this "sky is falling" pressure to pass these bailout initiatives, Congress has spent almost as much in bailouts alone this year as it has in the federal budget. And has certainly ignored any attempt at the preservation of the free market.

Congress is currently discussing a "Stimulus II" package, to potentially be voted on next week. The word "stimulus" is really a misnomer, used to shore up public support for yet another bailout. In reality, it's "Spending II: Bailout Returns." It's unclear as to whether Nancy Pelosi will be fighting Apollo Creed in this bailout sequel, but by the end of the 110th Congress, there will be more chapters in the bailout saga than there are Rocky movies.

The line for a piece of the bailout pie is growing as businesses see an opportunity for free money from the government (aka: you, the taxpayer). American Express is faltering because of high credit card default rates. Their bailout handout means that you are writing a check to cover the people who aren't paying their credit card bills. The "Big Three" auto producers, Ford, Chrysler and General Motors, received a $25 billion bailout in September. Now, they're back for more, claiming they need money to fund "innovation." You, the taxpayer, are writing a check to get them through this creative rough patch. Ethanol producers are also eagerly awaiting your money, as is the Medicaid program.

I am working diligently to find real and effective solutions to this economic crisis. There are other alternatives to constantly turning to the American taxpayers to bail out struggling companies, and I assure you I will continue to work with my colleagues on both sides of the aisle to find ideas that are in our best economic interest, both in the short and long term.


Erik B. Anderson said...

I always understood that copying whole articles and posting them on your own blog violates copyright law.

Thanks for posting this information. It is helpful, but I hope you don't get in trouble for it.

Warm Regards,

Erik B. Anderson
Independence Township, New Jersey
Established 1782

Jill said...

Funny how he doesn't mention the bailouts of AIG or other financial companies. I guess those are OK, and only bailouts that help individual working people are off-limits.

Anonymous said...

Sorry to have to correct you Jill, But he was also against the bailouts for the banks. He voted against the original $700 billion and the revised bill with the $150 billion worth of bribes added to gain the needed votes. I call this the $850 billion dollar bailout!

The smart move for the "Big Three" would be to move to Alabama and hire people who respect the ideals of working for your wages and individual credit and accomplishments like the employees working for Hyundai. The are far more productive and have a profit to show for every vehicle produced. I only own Chevys, Fords, and Dodge... But man, they need to open their eyes if the wish to continue in a successful business practice.