Published September 29, 2008
Delavar: Congress shouldn't buy bad debt
Michael Delavar, the Republican challenging U.S. Rep. Brian Baird, says he would not have supported the failed, $700-billion Wall Street bailout bill in Congress today. Baird did vote for it. "What we're seeing right now is a correction toward the appropriate valuation of the collected assets. By ignoring the reason for this correction, we’re simply prolonging the correction," Delavar said.The first draft of Treasury Secretary Henry Paulson's bill (see regional and party break downs of the vote here) included a few deliberately bad provisions like not capping CEO pay or blanket immunity for Paulson, Delavar said. Those became distractions."That was not the 800-pound gorilla in the room. Congress does not have the authority or the wisdom … to indebt American families, workers and children," he said, opposing any purchase of bad securities.He argued it was the federal policy of "easy money" and low interest rates that led to over-lending, and raising federal interest rates would encourage banks to do the same for customers. That would mean more money was left in bank accounts, easing the credit crunch, he said.You can read Baird's view of events here. In a nutshell, he felt better after helping to add a provision that ensured taxpayers would share in any profits of bailed-out firms, or impose fees on the financial system to make up any losses:
The conditions created by excessive debt on both the federal and personal level, our rising trade deficit, and the rising costs of energy all suggest we could still see a recession or worse in the coming months. These are challenging economic times and I believe this bill, while less than ideal, remains an important first step to solving the economic problems facing our country.