Barr: Fannie Mae/Freddie Mac Bailout Unfair to Taxpayers

This is a rush transcript from "Your World with Neil Cavuto," July 14, 2008. This copy may not be in its final form and may be updated.

CONNELL MCSHANE, GUEST HOST: My next guest says the move today is not good news for taxpayers.

Libertarian presidential nominee Bob Barr is with us.

Welcome to you, sir.

Video: Watch the 'Your World' interview

Now, why is this a bailout, first of all? Because as Brenda was going through details there, basically, what the Treasury said, what the Fed said is not that they would bail these companies out, but they would be there to help if something went wrong, not that they're going to do something now.

BOB BARR, LIBERTARIAN PRESIDENTIAL CANDIDATE: Well, of course, the Treasury has no money of its own. It's all taxpayer money. That's something that seems to get lost frequently in these discussions, where you have the government stepping in and saying, well, we're going to do this or we're going to that, and it's not a bailout because we're providing a backup or sort of a psychological blanket or a temporary line of credit.

But the bottom line is, this is all taxpayer dollars that we're talking about here. And, whenever taxpayer dollars are used or committed, even impliedly, the taxpayers of this country are being put at further risk.

MCSHANE: The question you have to ask yourself, as you know, in these situations is, what happens if I do nothing? What would happen if the Treasury, the Fed, the government did nothing in this case?

BARR: I think right now, doing nothing would not be advisable. As much as a Libertarian, we don't like to see — and I don't like to see — the government get further involved with yet another sector of the economy.

I think, because the government has caused this problem, similar to the savings and loan problem that the government caused a generation ago, it has to do something.

The question is, can it do enough by providing some temporary security, some temporary backup?


BARR: Yet, as long as it is done with the thought in mind that there has to be long-term congressional action here to restructure and reformulate the very way Freddie Mac and Fannie Mae operate, I think that would be an advisable solution, but not doing nothing.

MCSHANE: All right, so which part of it do you have a problem with, if any? Is it the part where they come in and say, all right, we might buy stock in these companies, the government buying equity in publicly traded companies? Is that where you have a problem?

BARR: I have a problem with that because that will simply lead to further government manipulation — which is always, by definition, artificial — of that sector of the marketplace, in this place — in this case, housing.

I think, though, that, if we — we have some — some temporary line of credit — and I think it's important to do this through the Congress, so Congress understands and has a stake in this as well.


BARR: But the ultimate goal, I think, has to be a very firm commitment to restructure Fannie Mae and Freddie Mac.

MCSHANE: Quick political question while we have you on, sir. I know you're running for president under the Libertarian line. The last poll we have — and we're showing it on the screen there — shows you with 3 percent support.

Why are you in the race?

BARR: Well, that's an old poll. The most — the more recent one by Zogby has — has us at 6 percent nationally, and actually in double digits in some states. That is a very strong base of support to begin a campaign as a third-party nominee. So, I think there is a tremendous opportunity there.

And these sorts of problems that have been manifested themselves by the work over the years of the Democrat and the Republican parties alike provides just that opportunity.


All right. Former Congressman Bob Barr of Georgia, Libertarian presidential nominee, we appreciate your time. Thanks a lot for coming on with us.

BARR: Thank you, Connell.

MCSHANE: All right.


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