I sent the following to my three Federal representatives, both Sens. Feinstein and Boxer and Congressman Bilbray this morning, before McCain's announcement that he's suspending his campaign in order to return to Washington and join passing whatever legislation is going to come out of the sausage machine.
I am very concerned about the headlong rush--some might say stampede--to spend $700 Billion to resolve the credit and banking crisis arising from the subprime mortgage debacle. I believe that if it is absolutely necessary to keep the economy from crashing, then by all means do it. But I am not yet convinced that there aren't other, less drastic and less costly means to accomplish the necessary ends. In short, hitting up the taxpayers should be the last resort, not the first.
I have read about several other possibilities for action that would reduce the potential hit to the taxpayers, such as the Government or its agent being a "buyer of last resort" for the bad paper at a stated, fixed percentage of their face value, or by temporarily suspending the "mark to market" rules relating to specified classes of securities, i.e., those for which no market exists, and sequestering them on the affected firms' balance sheets.
I'm no expert on markets or economics, but it doesn't take a genius to realize this is a complex problem. Accordingly, all the alternatives should be examined before a course is set. I understand the political pressures, but I think it's more important to get this right than to do it too quickly. It is also the duty of our Congress (both houses) to do what's best for the American people after duly considering all factors, and not succumb to the herd mentality, which was a factor in causing the crisis in the first place.
I urge you to carefully consider all the alternatives "with all deliberate speed" before voting for any plan. I also urge you to avoid trying deal with more than the most urgent issue in this legislation. It is at times like this that unintended consequences are most likely to arise, and whatever is enacted should be as simple as possible.
Labels: Banking, Economy, Finance, Financial crisis, politics, Regulation