Bailouts, Stimulus and TARP Packages
Washington, DC, July 23, 2013
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. Campbell) is recognized for 5 minutes.
Mr. CAMPBELL. Madam Speaker, there is a lot of talk these days about rescue plans and bailouts and TARP and stimulus packages. Let's take a minute to reflect on what has happened. Back in October we passed, and the President signed, a rescue plan which created the Troubled Asset Recovery Plan, so-called TARP.
There are those here on both sides of the aisle who believe that that didn't help, that that didn't do anything. Well, you know, you never get credit for bad things that don't happen.
Let me assure you, Madam Speaker, that the financial system of this country was on the verge of collapse, and we averted that collapse because of two things, because of the unprecedented and aggressive monetary action of the Federal Reserve, but also because of the rescue plan and the TARP that we passed and deployed back last October.
Now, you say, however, you averted financial collapse, but what's going on now? Look at unemployment, look at the economy.
What we were trying to avoid then was literally the collapse or the lack of function of our financial system and our financial structure. It was about to implode and to stop working at all.
It is still working, not as well as it should, not normally, but it is still working, and it gets a little better every day.
But we knew at the time, and said at the time, that the damage that had been inflicted at that point was going to start to affect employment and start to affect economic growth, and, in fact, it has.
We now know that millions of people have lost their jobs, lost their homes, or lost their businesses. More people are losing their jobs, their homes and their businesses every day.
The economy continues to sink and we don't know where the bottom will be. We can't see it at this point.
So what are we doing now? What is the purpose of all this economic discussion we are having now? Just one thing, we can't stop the recession, it has already happened, we are already in it. We can't retroactively go back and get the homes and the jobs in the businesses that have already been lost.
But what we do want to do is to make this recession as short and as shallow as we can. If we do nothing, the recession will end at some point, as all recessions do.
But if we can have it end sooner and save millions of people their jobs, their homes or their businesses, then we should do so.
So I believe we should act, and the first thing we should do is to continue the successful TARP program.
Now, some people say, well, it wasn't successful, because, look, we invested all this money in banks and they haven't started lending. In fact, much of the reason that they haven't started lending is because the financial condition of the banks is much worse than we all thought they were back last October. The money the banks got from the Federal Government merely enabled many of them to keep their current functions, but not to expand lending.
The additional money, which I think should be leveraged with private capital, in other words, a bank should only get future Federal Government TARP money if they go out and raise a matching amount of private capital so that we get more and more money in the financial system, such that they can have the capital from which they can begin to lend again.
And then there is the talk of a stimulus package, and I think we should have one. Again, I think the consequences of inaction are going to be very severe on this economy.
But there is one thing that the stimulus package should do. It should actually stimulate the economy, and do it quickly. If we wait a year or 18 months, the economy will probably find its own bottom. It will be a bad one, but it will find its own. What we need to do is things, stuff, that will take effect and have an impact in the next 6 months, largely, 1 year at the most, so we can prevent the loss of as many jobs and homes and businesses as we can.
Now, many people on both sides of the aisle are bringing up the same things and priorities that we all do, and that is great. I am a Republican. There is lots of tax cuts I like as a Republican. I know there is a lot of spending that Democrats like, and there is good arguments to do some of both. But we have a patient who has pneumonia, and if you say you should eat right and exercise, yes, you should. Eating right and exercise is always good. But if you have pneumonia, you need antibiotics, and telling the patient to eat right and exercise won't cure their pneumonia, and we need to cure the pneumonia first before we can eat right and exercise.
So we need things that are directly targeted towards the next 6 months in creating jobs, and one of the things I think we should do is look at the demand side of things. People are scared. People are afraid. Even people with jobs, with plenty of security. We should be stimulating people to buy homes and cars, and doing it quickly.