Recently, Rep. Mike Pence and a group of House Republicans introduced a piece of legislation that would put an end to U.S. IMF aid allocated to European Union countries in the midst of financial turmoil. Ultimately, these legislators ardently believe that European bailouts perpetuate the precedent of bailouts in general. Bailouts in general, as Rep. Pence and some of his congressional colleagues purport, are a tactic that, at the end of the day, hold average, working, taxpaying Americans accountable for the financial mismanagements of others. Therefore, bailouts institutionalize too big to fail, while simultaneously burdening uninvolved, outside parties; the majority of taxpayers that is.
Prior to the introduction of his legislation, Rep. Pence pointed out to Democrats that U.S. IMF bailouts would heavily fall on the shoulders of U.S. taxpayers; a consequence that would be likely be unfavorable to U.S. taxpayers.
More recently, Rep. Pence staunchly expressed his opposition to funneling U.S. IMF aid to crippling European Union nations:
I just don’t believe American taxpayers should be forced to bear the risk of nations that have avoided making tough choices…
Regarding the big picture, Rep. Pence feels that if the U.S. continues to engage in bailouts at home and abroad, then the U.S. will continue to edge closer and closer to a “European-style economy and political system.”
Rep. Pence is right to stand up for American taxpayers. By opposing the bailout approach, which is hardly a solution to any form of market turmoil, Pence acknowledges the fact that financial bailouts are no more than an artificial approach that inevitably undermines free market capitalism and puts taxpayers on the hook.
It is important for Americans to realize that domestic and foreign bailouts are, in large part, an imminent threat to taxpayers. The implications of these bailouts are not attractive. In essence, bailouts transfer power from the hands of producers and consumers into the hands of power hungry government officials. With that having been said, blocking Dodd’s financial reform package, and pushing Pence’s legislation through the House and Senate is a formula that will protect taxpayers from being subject to higher and new forms of taxation.