January 15th, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today strongly urged members of Congress not to release the additional $350 billion in TARP funds now being requested by the incoming Obama Administration.
“The Treasury and Federal Reserve have failed to accurately and satisfactorily account for the first $350 billion that has been disbursed. And Congress cannot with confidence now release the rest of the funds with no strings attached,” said Wilson.
A joint letter sent by 26 free market and limited government organizations today, which Wilson signed, also called upon Congress to pass a TARP disapproval resolution “to preserve some of the taxpayers’ assets and… spend the necessary time studying the underlying causes of the economic down-turn…”
The letter criticizes the Troubled Asset Relief Program’s execution by the Treasury. “The stated purpose of the TARP was to purchase toxic mortgage assets,” the letter reads. “Secretary Paulson abandoned this concept immediately after the signing ceremony. The TARP was also designed to reintroduce the flow of credit into the market and help stabilize Wall Street. To date, neither has been accomplished.”
Wilson believes that too easy credit and loose dollar policies, combined with too low interest rates and a desire by policymakers to give loans to those who could not afford to repay them caused the credit crisis originally.
“It was government that created the problems facing the economy today by creating asset bubbles that, once they popped, endangered the very survival of the financial system,” Wilson said.
Wilson also believes that government actions in response to the economic crisis have been based on flawed premises.
“Since the downturn began, more than $8 trillion has been pledged by government to prop up the economy, and yet, unemployment is rising and likely to rise well into this year, and government has done nothing to reform the policies that led to the crisis in the first place,” said Wilson.
“Instead, Fannie Mae and Freddie Mac were nationalized, as was AIG, the auto industry, the banks and other financial institutions, and the national debt has exploded to over $10 trillion, with no end in sight,” he added.
The letter from 26 conservative and limited government leaders criticizes Treasury Secretary Henry Paulson as having “invaded the free market, propping up some companies to the detriment of others and purchasing stock in banks without requiring accountability or transparency about the use of taxpayer funds.”
“It is up to the incoming Administration to, as the letter states, to provide ‘an accounting and detailed explanation on how the initial TARP funds have been used and the prospect of a taxpayer recovery of these funds,” said Wilson.
“Until then, if they cannot account for the last $350 billion, there is no way Congress should release the next $350 billion,” Wilson concluded.
# # #