Ron Paul: Big government got us into this mess
September 25, 2008 by Personal Liberty News Desk
Representative Ron Paul of Texas has placed the blame for the current economic downturn squarely on missteps taken by U.S. government.
In an exclusive column for CNN, Paul describes how government intervention in the market has resulted in artificially inflated prices that do not match consumer demand.
He criticizes the government support of Fannie Mae and Freddie Mac, as well as the Federal Reserve’s "loose monetary policy" that allowed it to manipulate interest rates, as factors that have resulted in the housing bust and subprime mortgage crisis.
Furthermore, Paul suggests that the recent bailouts and proposed $700 billion rescue scheme will only exacerbate the situation by further distorting the market and encouraging banks’ risky behavior.
"Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring greater instability in the financial system in the long term," he writes.
Paul, who serves on the House Committee for Financial Services, is not the only politician who has criticized government bailouts recently. In a speech, Senator John McCain said the Federal Reserve should "get back to its core business of managing our money supply and inflation."