'The Bailout from Hell': Libertarian Presidential Candidate Bob Barr Blasts the Fannie and Freddie Bailout Plan

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This is a rush transcript from "Your World With Neil Cavuto," September 8, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right, so, what about Bob? Well, Bob ain't happy either.

Libertarian presidential candidate Bob Barr says, at the rate we're going, we could be looking at close to a trillion-dollar deficit, and that's a lot of bailouts. And that is if we're lucky.

He joins us by phone.

So, Congressman, this is just the kind of thing you hate to see, the government in, rescuing entities that -- that shouldn't be rescued.

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BOB BARR, LIBERTARIAN PRESIDENTIAL CANDIDATE: Well, it's like I think it was Albert Einstein who gave as the definition of insanity once years ago, doing the same thing over and over again, but hoping for a different result every time. I mean, as Ronald Reagan said, "here we go again."

CAVUTO: All right, but the argument was that these guys were almost too big to fail, that Fannie Mae and Freddie Mac, if something had happened to them, the trillions in mortgages they back up would all of a sudden be in trouble. What do you make of that?

BARR: Well, the problem is, what the government is doing here is, they're -- they're not solving the problem. They're -- they're simply glossing over it. And their apparent long-term solution is not a solution at all. It`s simply to keep these GSEs propped up with taxpayer dollars. They have no earthly idea what the liability, ultimate liability, for the taxpayers are going to be. This is the height of irresponsibility.

Michelle was very kind when she called it "the mother of all bailouts." It's really a BOFH. This is a bailout from hell.


CAVUTO: All right, a lot of acronyms there.

Nevertheless, Wall Street liked it today, and they were of the opinion, Congressman, that maybe this is as bad as it gets. Maybe this is a turning point. Now, I have heard this before with other rescues, from Bear Stearns and -- and forward.

Is this is the charm?

BARR: I mean, no. This -- this -- this wishful thinking on the part of Wall Street is pretty standard operating procedure for them.

I mean, Wall Street, despite the fact that they like to view themselves as captains of capitalism, they love the government to help them out. And I tell you, you know, there's others already lined up. The auto industry is already lined up. And you're sure as heck going to hear this used a -- as an excuse for the government next to start bailing out the auto industry.

CAVUTO: Well, you know, they have already set the stage for that.

The auto industry, as you know, Congressman, has talked about $50 billion, $60 billion it might need. I cannot imagine a politician, Republican or Democrat, refusing that. The argument is always going to be, "You did this for Fannie and Freddie and Bear Stearns and IndyMac. You might as well do it for us." And -- and no one is stopping this gravy train.

BARR: No. They are -- neither of the two major parties is going to. I mean, this is -- this is what we hear on -- what I`m hearing on the campaign trail and the message that is resonating with Americans.

CAVUTO: But is it resonating...

BARR: Sooner or later, we have to stop this.

CAVUTO: All right. Congressman, you say it's resonating. And I -- I admire your tough-love approach, but does that get you votes? I mean, if you're telling the American people, "I'm not here to help you or the companies via the government," that might, in fact, be the way to go, but how's that going to win you votes?

BARR: Well, it's -- it's not -- it`s not saying we're not going to help.

What we're saying is, if, in fact, there is going to be some temporary assistance provided -- because, after all, it was the government that got us into this problem in the first place by irresponsible use and propping up of the GSEs -- there has to be a long-term solution, which is privatization. That's what`s missing in all this.

CAVUTO: Well, but a lot of private firms got in deep doo-doo, too, right?

BARR: A lot of what?

CAVUTO: A lot of private firms got in deep doo-doo. Bear Stearns was a prime...

BARR: Well, yes, and that was their own fault. What I'm saying is, at best, at most, what the government ought to be doing here is providing a short-term fix, or short-term capital fix, but to demand and make as part of the ultimate legislation here a legislative solution to privatize these industries. That -- they're not going to do that.

CAVUTO: All right.

BARR: And they're simply buying time.

CAVUTO: Congressman, thank you very much.

Bob Barr, the Libertarian presidential candidate. All right.


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