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AFP Statement on the Revised Financial Bailout Package Americans for Prosperity President Tim Phillips today released the following statement: Americans for Prosperity released a statement on the morning of Monday, September 29, 2008, in regards to the proposed federal bailout. The statement both noted reasons in favor of the then-pending legislation, as well as concerns and reasons for opposing the pending legislation. In fact the September 29th statement was qualified with the observation: "The pending legislation is growing unpredictably and is hard to comment on." Indeed, since AFP released its initial statement, the legislation has continued to change after its defeat in the U.S. House on September 29th, with the passage of a new Senate version on the evening of Wednesday, October 1st, 2008, and many alternative proposals being developed and offered. The most important lesson in this crisis is that there are consequences to government policies that distort lending standards in order to promote other social goals, and to overly accommodative monetary policy that creates asset bubbles. Fannie and Freddie were government designed institutions whose design necessarily transferred risk to taxpayers while allowing profits to go to private shareholders, encouraging them to grow to a dangerous size with dangerous consequences. They should be expeditiously privatized as part of any ultimate solution to the current crisis. Americans for Prosperity opposes the most recent Senate version of the bailout legislation, which added pork-barrel special-interest provisions, as well as questionable global warming provisions, to the bill. Americans for Prosperity believes that the U.S. Treasury and Congress should instead consider and take up the serious and credible alternative proposals which will better protect the taxpayers, are consistent with principles of a free market under the rule of law that prevents force and fraud, and, will provide long term fundamental reforms to prevent such a crisis from occurring again. If the US Congress does pass bailout legislation similar to the Senate version, Americans for Prosperity strongly urges the U.S. Treasury, U.S. Congress and the public policy community throughout America, to continue to pursue alternative proposals that may be adopted by the next Congress in early 2009. In particular we would like to see the greatest possible use of tax-advantaged private capital, and believe that the way that recapitalization is structured must be based on an objective analysis of the techniques that have been used in other banking crises around the world, with due consideration given to equity investment and loans as alternatives to asset purchases. Proposals to suspend dividends for banks to rebuild their own capital position may also have merit. We will also continue to argue strongly that this financial crisis is the result of flawed government policies and not a failure of a free market supposedly run amok. With that in mind, we will dedicate the coming weeks, months and years to supporting reforms that strengthen our economic freedoms while fighting against those who will no doubt try to use this crisis to promote their long-held desires to dramatically expand the size, reach, and cost of the federal government through some kind of a "New New Deal." |
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