The Bailout Mentality Ends Here

Conn Carroll / December 02, 2008

It’s bad enough that there are already legions of lobbyists lining up in Washington for their slice of the upcoming $700 billion-plus pie. But when our nation’s local government leaders join the bailout parade, you know our nation’s sense of personal responsibility has significantly deteriorated. Earlier this week the U.S. Conference of Mayors gave their $90 billion wish list to Congress and now Democratic governors are meeting with President-elect Barack Obama to press for their own $500 billion payoff.

Fortunately there are still some leaders that understand the damage this self-perpetuating bailout parade is causing the nation. Govs. Rick Perry (R-TX) and Mark Sanford (R-SC) write in today’s Wall Street Journal:

As governors and citizens, we’ve grown increasingly concerned over the past weeks as Washington has thrown bailout after bailout at the national economy with little to show for it.

In the process, the federal government is not only burying future generations under mountains of debt. It is also taking our country in a very dangerous direction — toward a “bailout mentality” where we look to government rather than ourselves for solutions. We’re asking other governors from both sides of the political aisle to join with us in opposing further federal bailout intervention…
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In a free-market system, competition and one’s own personal stake motivate people to do their best. In this process, the winners create wealth, jobs and new investment, while others go back to the drawing board better prepared to try again.

To an unprecedented degree, government is currently picking winners and losers in the private marketplace, and throwing good money after bad. A prudent investor takes money from low-yield investments and puts them in those that yield better returns. Recent government intervention is doing the opposite — taking capital generated from productive activities and throwing it at enterprises that in many cases need to reorganize their business model.
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In Texas and South Carolina, we’ve focused on improving “soil conditions” for businesses by cutting taxes, reforming our legal system and our workers’ compensation system. We’d humbly suggest that Congress take a page from those playbooks by focusing on targeted tax relief paid for by cutting spending, not by borrowing.

In the rush to do “something” to help, federal leaders would be wise to take a line from the Hippocratic Oath, and pledge to do no (more) harm to our country’s finances. We can weather this storm if we commit to fiscal prudence and hold true to the values of individual freedom and responsibility that made our nation great.