September 23rd, 2008
10:00 AM ET

Bailouts will lead to rough economic ride

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/POLITICS/09/23/paul.bailout/art.ron.paul.gi.jpg caption="Rep. Ron Paul says the government's solution to the crisis is the same as the cause of it - too much government."]

Editor's note: Ron Paul is a Republican congressman from Texas who ran for his party's nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.

Rep. Ron Paul
(R) Texas

Many Americans today are asking themselves how the economy got to be in such a bad spot.

For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.

Unfortunately, the government's preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.

Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.

Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.


Filed under: Raw Politics • Ron Paul • U.S. Federal Reserve
soundoff (53 Responses)
  1. sam brody

    I have to ask why is it that people who bought expensive homes worth 2,3,4,5,6,$700,000. or more expect people who live in homes worth $150,000 or less be expected to bail them out? Why do we have to bail out people who own more than 1 home....sell the extra one and pay off your own debt! Why do we have to bail out investors who purchased multiple homes looking to cash in.....don't come to me for a hand out...you blew it! If I new that I could have bought a $3 or $400,000. home last year and have the govenment and yes, it's people pay for my luxury living.....hey, sign me up!! You made bad stock choices? Tough! Sell off your cars, boats,time shares, vacation homes, motorcycles and your $50,000 make over rooms...pay off your own debt and leave the middle class tax payer alone. We are fed up with picking up the tab for everybody!

    September 26, 2008 at 11:08 am |
  2. Terra Hoskins

    I agree with what Debbie said upthread and I think Ron Paul is extremely insightful about this. I have only heard one expert say that this is largely a culture crisis. That living on credit and buying houses you can't afford leads to, well, our current situation. Yes there is greed on Wall Street. There is greed in government, and hey, there is greed among average American people.

    It frustrates me that people are trashing the concept of a market-based economy because we're now in trouble. But for years this system has worked and has made America pretty prosperous. Either have a market economy or don't, but don't expect the same results when you start manipulating it.

    September 24, 2008 at 2:55 pm |
  3. Mike Dorkoski

    Think bottom up, not top down. The answer is easy – do the math. The $700 B will become $2 Trillion, according to the press AND our shared experience.

    Take $2 Trillion and divide by the 138 Million taxpayers in this country, you get about $14,500 for every taxpayer.

    Give it to us instead of Wall Street. We'll make our balloon payments, we'll buy groceries, we'll park it away in money market accounts at our corner bank.

    It will have the same effect, except perhaps that the Wall Street greed brokers will have to face the music. The economy will be fine and our children/ grandchildren will have to sort it out.

    September 23, 2008 at 6:46 pm |
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