In a press release connecting the proposed bailout of collapsing Wall Street firms and the exponentially growing national debt, Chris Cole called the United States’ “waddling debt” a “duck.” Cole is the Libertarian candidate for the open US Senate seat in North Carolina.
Cole compared the bailout to a Wall Street investor walking up to an American on the street and asking for that person to pick up his hotel bill of thousands of dollars. “That American would probably ask to share whatever that investor has been smoking,” he commented, and continued on to say that this was on top of an already staggering $9.2 trillion dollar federal debt.
In the reasoning for his opposition to the bailout, Cole claimed that the Federal Reserve was acting irresponsibly, and that there are long term consequences not being considered:
It gets even worse. The buyout of AIG is from the Federal Reserve, not the Federal Treasury. The big open secret is that Federal Reserve checks aren’t drawn on any account; they represent money created out of thin air. That means $85 billion will be added to the money supply, creating an additional ripple of inflation, a hidden tax whenever we buy groceries, pay our doctors, or buy school supplies for our children. Does anyone remember a politician telling us that? Can you hear the quacking?
In spite of the hype, there are three long term consequences to the buyouts, on top of the added debt burden: First, the inflationary effect of Federal Reserve cash infusions; Second, by preventing the bankruptcy of poorly-run corporations, the buyouts preserve non-performing assets that would have been transferred to more-efficient, self-supporting buyers. That will result in lower economic growth, slower job creation, and stunted income growth; Third, it creates a sense of security, whether realistic or not, that businesses will be rescued from the consequences of bad business decisions. This will increase risky loans and investments, not reduce them.
That is why I opposes these buyouts, as well as all forms of corporate welfare. American taxpayers should never be on the hook for the profits of businessmen.
Good job, Chris!!