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Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term. The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.
It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place. The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector. Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.
“Long term this is disastrous,” continued the Congressman, “we’ve already pumped in $700 billion dollars, here’s another $700 billion dollars - this is going to destroy the dollar - that’s what you should be concerned about - if you destroy the dollar you’re going to destroy a worldwide economy and that’s what we’re on the verge of doing.” Paul said that the long term implications of the bailout would be a lot more serious than the problems currently being experienced by Wall Street.