National Review Online
Take It Back
The government must begin the process of extricating itself from the financial sector of our economy.
By Jim Inhofe
November 21, 2008
The events which have occurred since passage of the financial "rescue program" last month should concern every American who cares about the integrity of our system of government and how it does its business. Congress entrusted one unelected official with the unprecedented power to distribute $700 billion-no strings attached. This Congress has set an extremely dangerous precedent, but it also has a chance for redemption.
Treasury Secretary Paulson recently came before Congress and said that if he wasn't immediately empowered with his plan to buy $700 billion worth of troubled assets we would all be held responsible for the cataclysmic consequences of not "doing something." Then the plan wasn't troubled assets anymore. The new plan was taking positions in major banks. Then we learned that the plan to buy troubled assets had been entirely abandoned and that we should stay tuned for the new plan involving consumer credit markets. Now we learn that the new plan is no plan for the remaining $350 billion of the original $700 billion. The money is to be available for "flexibility." With all due respect, I don't think "flexibility" and "$350 billion in taxpayer dollars" belong in the same sentence.
The original justification for granting unprecedented authority to the Treasury Secretary was to prevent a financial meltdown that could drag us into a Depression-like scenario. Last week, Secretary Paulson stated in an interview on CNBC that "the financial markets have been stabilized." That's good news, but the question then becomes: If the threat of an all-out financial calamity dragging us back to the 1930s has subsided, should the unprecedented authority to prevent it subside as well?
Congress gave Secretary Paulson the $700 billion in two installments of $350 billion. The first has been used and the second has not. If the financial markets, though still troubled in many ways, are stable, Congress needs to remove the authority for the second $350 billion dollar installment.
The American people have been shocked, and frankly disgusted, to watch their government spend $4.28 trillion dollars (the total spent by the Fed, Treasury, and Congress) to bailout institutions that only last year showered their top executives in cash. At the same time, we are about to confront an unheard of $1 trillion deficit this year alone. Since there is no plan for this money, and the crisis for which its availability was made no longer threatens us with absolute economic devastation, perhaps it should not be added to the deficit. There comes a time when you have to draw the line in the sand. That time is now, and the line I am drawing is refunding the remaining $350 billion to the American taxpayer by removing the authority to spend it.
Of the many reasons why I voted against the bailout last month, there are two I would like to note here. The first was that it set the precedent that any troubled industry could lobby for bailouts and handouts. The second was that we were handing over $700 billion to essentially one man to spend as he sees fit. This was something we had never done before in our history, and I didn't think it would be good for our system of government. It's my hope that the events of the past few weeks have convinced some of my colleagues that these are good reasons to take a second look at what we have done and to reverse our present course.
We have the opportunity to do so during the lame duck session. This Congress has the opportunity to show American taxpayers that its government still cares about them, too, and it can do that by taking back what's left of the $700 billion. Doing so just might help the American people have a little more confidence in the integrity of our institutions and the common sense of our leaders.
The greatest threat to our economy is not some obscure divergence of bond yields anymore. By far the greatest threat to economic growth and prosperity in the years to come is the extent to which the government has recently entangled itself in the marketplace. The government must immediately begin the process of extricating itself from the financial sector of our economy. Let's begin that process.
This has been and will continue to be a difficult time for all Americans. The unwinding of past mistakes is never a pleasant process. However, many of us believe additional government attempts to make that process more pleasant will not only be futile, but will also move this country further from those first principles that have made us the great nation we are today.
- Jim Inhofe is a Republican U.S. senator from Oklahoma.
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