Senate Should Reject Housing Bailout, Says Bob Barr

“Both the House and President George W. Bush have surrendered in the battle to protect America’s taxpayers from yet another expensive and unnecessary bailout,” says Bob Barr, the Libertarian Party candidate for president. “The $300 billion measure yesterday approved by the House and endorsed by the White House won’t just pay off improvident borrowers and lenders. It will create yet another piggy-bank for activist groups at public expense. Now it is up to the Senate to say no, though that appears unlikely, given the size of the House majority and President Bush’s promise to sign the bill,” notes Barr.

“The sub-prime lending crisis is largely a crisis of government,” adds Barr. “Congress and both Presidents Bill Clinton and George W. Bush pressed banks to lend more money in poor neighborhoods to less credit-worthy borrowers. The Federal Reserve pushed down interest rates to encourage more lending. Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development subsidized home ownership. Now we are all paying the price for a boom gone bust,” says Barr.

“However, Congress insists on exacerbating the problems it helped create,” adds Barr. “This legislation is a shameless special interest Christmas tree: it bails out foolish homeowners and lenders, provides money for the irresponsible Fannie Mae and Freddie Mac, diverts taxpayer money to new home buyers, gives the earnings of Americans to state and local governments to purchase foreclosed homes, and takes more money from hard-pressed taxpayers for low-income housing. The bill also increases federally-funded housing insurance and reduces federal restrictions on state tax-exempt housing bonds. We are creating a no-fault economy, in which the taxpayers bail out everyone for every mistake they make,” Barr observes.

“At some point we must say no to more spending,” insists Barr. “We already have a national debt of $9.5 trillion. We are running deficits of $400 billion a year. The Iraq war could end up costing us as much as $3 trillion. It might take tens or hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac; in fact, they have as much as a trillion dollars worth of bad loans, which the taxpayers risk getting stuck with. Social Security and Medicare have unfunded liabilities in the tens of trillions of dollars. When will it stop?”, asks Barr.

Some people are confused by the federal government. “But Washington is really very easy to understand,” says Barr. “It means more government, more regulation, more spending, and more waste. The latest House bailout is more—much more—of the same. The latest bailout will even spend $210 million on “counseling” programs—which already are widespread—for people with problem mortgages. The taxpayers always are left to pay the bill. ”

Barr represented the 7th District of Georgia in the U. S. House of Representatives from 1995 to 2003, where he served as a senior member of the Judiciary Committee, as Vice-Chairman of the Government Reform Committee, and as a member of the Committee on Financial Services. Prior to his congressional career, Barr was appointed by President Reagan to serve as the United States Attorney for the Northern District of Georgia, and also served as an official with the CIA.

Since leaving Congress, Barr has been practicing law and has teamed up with groups ranging from the American Civil Liberties Union to the American Conservative Union to actively advocate every American citizen’s right to privacy and other civil liberties guaranteed in the Bill of Rights. Along with this, Bob is committed to helping elect leaders who will strive for smaller government, lower taxes and abundant individual freedom.