Barrett’s Bearish On Bailout

It’s not hard to hear the frustration in U.S. Rep. Gresham Barrett’s voice as he rehashes the last few weeks of his life up in Washington D.C.

“My colleagues on both sides don’t get it – they just don’t get it,” South Carolina’s Third District, third-term Congressman says. “If we continue to spend on everything, we’ll have nothing left to spend on anything. I honestly can’t think of anybody we’ve ever said ‘no’ to up here.”

Nor is that trend likely to change as the U.S. government tweaks the largest federal intervention in the American economy since the New Deal … all to address a crisis of its own making.

“There will be a plan, both sides have committed to it,” Barrett says. “They’ve said we won’t leave D.C. until we come up with one. The question is, will the plan be palatable? Will it have free market precepts like cutting cap gains taxes?”

As one of the few fiscal conservatives in either major political party (we count about 50-60 like him in the U.S. House, maybe five in the U.S. Senate), Barrett is used to going against the grain of politicians who view taxpayer advocates like him and U.S. Senator Jim DeMint as obstacles to their own taxpayer-funded, entitlement-fueled fiefdoms.

Quite simply, both South Carolinians have emerged as islands of common sense in a sea of big-spending, self-serving “bipartisanshit.”

Last night, Barrett called our own Sic Willie to get a few things off his chest as Republicans and Democrats in Washington inched closer – and then further away – from a deal that would bail Wall Street out of $700 billion worth of bad loans, most of them from government-mandated lending practices.

“First they said we need $85 billion for Bear Stearns and that’ll solve it,” Barrett tells Sic, building a rhythm. “Then they said we need $200 billion for Fannie and Freddie and that’ll solve it. Then they said we need more to prop up AIG and that’ll solve it, and then they come back now with $700 billion and say that’ll solve it all – that’s the most liability we’ll have to incur.”

“That’s four times they’ve come back – my question is what happens when they come back the fifth time? Or the sixth time?”

Exactly … and what happens when this bailout plan pushes the national debt to an absurd $11.6 trillion – adding untold billions of dollars on interest payments that already consume nearly half a trillion dollars each year?

“I’ve said for six years that my biggest fear is that we wake up one morning and the world market decides that enough is enough and the currency standard will be the Euro, or the Yen or the Dinar,” Barrett says. “What happens to us then?”

It’s not a pretty picture, and Barrett wasted no time painting its grim outlines when he questioned Federal Reserve Chairman Ben Bernanke (another South Carolinian) about the bailout plan earlier this week.

“What my daddy always told me is that you can’t borrow your way out of debt. I asked Bernanke about that and he really didn’t answer the question.”

“Jobs have taken the path of least resistance,” Barrett adds. “We’ve got relatively low unemployment but the wage level has remained low, and because of that people are having a horrible time making ends meet. We’ve got an economy based on consumer spending, but much of that consumer spending is based on credit.”

Sort of like all the unpaid credit the government keeps racking up – and not just in the form of bailouts.

Social Security, Medicare and other entitlements are eating up huge percentages of the federal budget, yet their accumulating unfunded liabilities and unsustainable benefit levels remain the “third rail” for politicians already scared of their own shadows each election year.

“I think the entitlement reformation is going to be just like the current crisis – where the next step is literally off the cliff,” Barrett says.

That’s sad, but true. Politicians never act unless a loaded gun is pointed at their heads, people.

Worse still, the few who do have the nerve to protest the insanity of continuing down our current path are routinely shouted down by the Barney Franks of Washington – people who refuse to acknowledge the disaster they’re creating while its happening but then hypocritically masquerade as the saviors (with your money) when it all hits the fan.

Make no mistake – how America handles its “bidness” over the next few days will set the tone for our country’s fiscal future for decades. And maybe it’s just us, but shouldn’t we start listening to some of the guys who didn’t land us in this mess in the first place? Guys like Barrett, or Demint, who yesterday summed up his opposition to the bailout like this:

“The government broke it. I don’t trust them to fix it.”

Right on.

Based on our politicians’ behavior yesterday, we don’t trust them to fix it either.

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