Schansberg encourages Hill to stand firm against bail-out

Schansberg encourages Hill to stand firm against bail-out

Dr. Eric Schansberg, an economics professor and the Libertarian candidate for the U.S. Congress in Indiana’s 9^th District, responded to the House defeat of the proposed $700 billion bail-out in the financial sector—and praised Rep. Baron Hill for voting against it.

Asked about Hill’s vote, Dr. Schansberg said, “It’s clear that Baron is not categorically opposed to another bail-out. And he’s not a fiscal conservative by any objective measure. So, I don’t know the reasons for his vote today. Maybe it’s the right vote for the wrong reasons. In any case, I’m thankful that he took a stand today for fiscal conservatism. Hopefully, he’ll continue to have a strong enough spine to hold that position.”

On fiscal conservatism in general and the bail-out in particular, Schansberg said: “At some point, we have to rely on markets again. And we can’t afford to borrow money to bail out industries and try to artificially boost the economy. All of our spending and debt threatens to devalue our dollar further and drive our economy into a ditch.”

On potential policy changes, Schansberg applauded Mike Sodrel’s proposal to suspend the capital gains tax and to revisit “mark-to-market” accounting rules: “From what I’ve read, ‘mark-to-market’ accounting rules are the most underrated cause of the current problems. Certainly, the sub-prime mortgage mess and government involvement in Fannie Mae and Freddie Mac are at the top of that list. But ‘mark-to-market’ combined with aspects of Sarbanes-Oxley seems to be a major contributor.”