Friday, October 3, 2008

Pricy prescription for credit crisis still a bitter pill

Today, for the second time this week, U.S. Rep. Lynn Westmoreland voted against the $700 billion bailout bill. The legislation passed the House 263-171.

“I voted no on Monday because I didn’t think that our leaders had taken the right approach to the financial crisis,” Westmoreland said. “I voted no today because it’s the exact same ‘solution’ but with sweeteners added to attract votes.

“Because of this week’s actions in Washington, Americans who pay their taxes and who pay their mortgages on time and who acted responsibly will be handed a tab for up to $700 billion. My constituents in Georgia’s 3rd Congressional District called and wrote me in record numbers over the past two weeks, and by a margin of 9-1 they asked me to oppose this bill.

“This bailout may or may not help our economy in the short term. In the long term, it puts us on a dangerous path toward government ownership of private securities and creates a ‘moral hazard’ – investors and businesses will believe that risky bets will enrich them if they succeed and government will write a check if they fail.

“We face serious challenges in our economy and I do believe that Congress can help. But this legislation is not the answer.”

Westmoreland points out that Treasury Secretary Henry Paulson presented his three-page plan to Congress two weeks ago, warning that the markets would collapse if Congress didn’t act within days.

“The secretary was clear that NO alternatives were considered, and I believe that too much is at stake to do this in a closed process,” Westmoreland said. “I, along with other members of the Georgia delegation, advocated for free-market solutions that would have put liquidity into the credit markets, while putting the responsibility on the offenders, not the innocent taxpayers. I want a ‘workout’ not a ‘bailout.’ Our present credit crisis derives from millions of Americans defaulting on their mortgages. This legislation does nothing for those homeowners; instead it focuses its assistance on the Wall Street titans who bundled, bought and sold these toxic securities and made millions doing it.”
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