Thursday, September 25, 2008

Schansberg: “Are you kidding me?”

September 25, 2008


Schansberg: “Are you kidding me?”

Dr. Eric Schansberg, an economics professor and the Libertarian candidate for the U.S. Congress in Indiana’s 9th District, responded to President Bush’s call for a $700 billion bail-out in the financial sector—and called on Rep. Baron Hill to resist the urge to vote in favor of it.

Asked about the bail-out, Dr. Schansberg said: “There are many reasons—large and small—to oppose the President’s proposal. To start with, it’s not constitutional. Beyond that, it’s not ethical. Why should the government take money from taxpayers to subsidize bad decisions by lenders and borrowers? Finally, it’s unlikely to be practical.”

Expanding on how the bail-out would work in practice, Schansberg said, “Why would we want to give money to those who have misused it? Why would one expect the federal government to do a good job with this? We should have never got involved with Fannie Mae or Freddie Mac. We shouldn’t have subsidized risky decisions. This is welfare for the rich and a bail-out for bankers.”

On the broader issue of bail-outs and fiscal conservatism, Schansberg said, “President Bush and his Congresses have been spending money like it grows on trees: $300 billion for a farm bill, $168 billion to try to bail-out the economy, Fannie Mae, Freddie Mac, AIG, etc. The list goes on and on. Unfortunately, the patience of lenders financing our expanding debt will not go on and on. The dollar has already taken a beating, resulting most notably in much higher gas prices. We must return to fiscal sanity or we risk driving our economy into a ditch. $700 billion? Are you kidding me?”

Referring to Rep. Hill, Schansberg said, “Baron’s claim to be a fiscal conservative is simply not supported by the evidence. But in this case, he has the opportunity to be a fiscal conservative on this one vote—by voting against any such proposal. I hope he will show leadership and courage on this issue.”