Hackett: bailout must protect taxpayers - avoid giveaways

Dallas — Pennsylvania’s Tenth District Republican congressional candidate Chris Hackett has expressed strong reservations about the $700+ billion financial bailout proposal being considered by Congress. Hackett commented, “While the federal government should take action to stabilize the financial situation, some types of actions would make our long-term economic outlook much worse, and should be rejected. Doing nothing more than bailing out investors and passing nearly a trillion dollars in bad debt onto the backs of already overburdened taxpayers and future generations is the wrong way to go.” Hackett outlined five key steps that should be included in any such package: Guarantees that if these bailouts are successful, any taxpayer cost be offset by returns that go back to taxpayers rather than company executives and shareholders. Reform of government policies that contributed to the financial meltdown, including terminating Fannie Mae and Freddie Mac’s status as Government Sponsored Enterprises, to prevent the kinds of high risk mortgages that led to the current crisis. Structure multiple entities (minimum of five) to compete for the purchase of troubled assets, limited to residential home mortgages. Rather than Treasury Department control, have an independent board of directors who report quarterly to Congress on progress and results. Do not allow the current crisis to be used as an excuse to push additional special interest corporate bailouts that have no comparable systemic economic implications, such as the $40 billion being requested by the auto industry. Reduce tax burdens on investments and real estate to attract new private capital to our markets, thereby relieving the pressure to call upon taxpayers to provide public capital. Hackett continued, “If these mechanisms are in place, we could turn the lemons of this gigantic bailout into lemonade, but if they are not, I’m afraid taxpayers will just be stuck with lemons, and extremely expensive lemons at that.”