Statement of Ron Paul on H.R. 5140, the economic "stimulus" bill:
Madame Speaker, I find it odd that HR 5140, a bill allegedly designed to provide a stimulus for the anemic American economy, contains provisions that could damage the economy and hurt American taxpayers. Specifically, the provisions increasing the loan limitations of the Federal Housing Administration and the Government Sponsored Enterprises (e.g. Fannie Mae and Freddie Mac), will exacerbate the long-term problems in the housing market, and may even lead to a future taxpayer bailout of the housing industry. The recent bursting of the housing bubble should have taught my colleagues the dangers of government polices that distort the market by diverting resources to housing, when those resources would be more efficiently used in other sectors of the economy.
Ironically, many of the same members who insisted that upper income taxpayers be denied the tax rebates are enthusiastic champions of the provisions in HR 5140 increasing the FHA loan limit to $633,500 and the GSE loan limit to $729,750. This increase in the loan limits represents a generous taxpayer subsidy to high-income homeowners.
A one-time “rebate” check, while it may provide a temporary boost to many working American families struggling with the current downturn, is not going to provide the type of sustained income growth necessary to restore consumer confidence. In fact, history shows that when the government forgoes serious tax cuts in favor of one-time “rebates” most people either save the money for a “rainy day” or use it to pay down some of their debt.
Read the rest of Rep. Ron Paul's statement