My favorite member of the Congress, U.S. Congressman Mike Pence from Indiana, is circulating the following “Dear Colleague” letter among his fellow House Republicans regarding the current economic conditions and bailout proposals....
Republicans Should Oppose the Bailout Plan
“Nationalizing Every Bad Mortgage in America Is Not the Answer”
Dear Republican Colleague:
Our financial markets are in turmoil and the Administration was right to call for decisive action to prevent further harm to our economy, but nationalizing every bad mortgage in America is not the answer.
As Bill Kristol wrote in “A Fine Mess” in today's New York Times:
"And I acknowledge that there are serious people who think the situation too urgent and the day too late to allow for a real public and Congressional debate on what should be done. But — based on conversations with economists, Wall Street types, businessmen and public officials — I’m doubtful that the only thing standing between us and a financial panic is for Congress to sign this week, on behalf of the American taxpayer, a $700 billion check over to the Treasury. "
The Administration's request amounts to the largest corporate bailout in American history. Congress should act, but should act in a way that protects the integrity of our free market and protects the American taxpayer from more debt and higher taxes. Congress must not hastily embrace a cure that may do more harm to our economy than the disease of bad debt.
And the stakes for our free market could not be higher.
As George Will observed on ABC's This Week with George Stephanopoulos program yesterday,
"When the British Labour Party was socialist, it defined socialism as government control of the commanding heights of the economy. And in Britain, at that time, it was coal, steel, and railroads. The commanding heights of the American economy are financial services, and they are now controlled by the government. "
To avoid a slide into socialism for our financial sector, Congress must consider all available options to put our nation's economy back on its feet. There are no easy answers but there are alternatives to massive government spending.
As was observed in an editorial titled “A Bad Bank Rescue” by Sebastian Mallaby published in The Washington Post on Sunday, September 21, 2008:
"Within hours of the Treasury announcement Friday, economists had proposed preferable alternatives. Their core insight is that it is better to boost the banking system by increasing its capital than by reducing its loans. Given a fatter capital cushion, banks would have time to dispose of the bad loans in an orderly fashion. Taxpayers would be spared the experience of wandering into a bad-loan bazaar and being ripped off by every merchant. "
Alternatives to a massive federal bailout must be fully considered and debated before Congress acts.
Finally, any new expenditure of taxpayer dollars should be paid for with fiscal discipline and reform. If Congress decides to spend nearly 1 trillion dollars on a corporate bailout, it must find budget savings to prevent that cost from being passed along to the American people.
As our distinguished former Republican Speaker of the House, Newt Gingrich, wrote in a post titled “Before D.C. Gets Our Money, It Owes Us Some Answers” on The Corner on National Review Online yesterday and prominently displayed today on the homepage under the headline “Newt: Wait One Minute”:
"Congress has an obligation to protect the taxpayer. Congress has an obligation to limit the executive branch to the rule of law. Congress has an obligation to perform oversight. Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess. "
I urge you to join me and other conservative voices in opposing the bailout plan. Republicans should demand that Congress take time in deliberating the merits of any legislation until the facts and competing solutions can be fully debated. We should demand consideration of free market alternatives to massive government spending and we should fight to pay for the solution through budget cuts and reform instead of more debt or taxes.
Member of Congress