Ed Royce: “I guess part of my concern here is philosophical, but I think that ideas have consequences, and bad ideas have bad…”

“I guess part of my concern here is philosophical, but I think that ideas have consequences, and bad ideas have bad consequences in policy. And specifically what I worry about here are two challenges that the U.S. faces; one is a budget deficit right now which, when we look forward, it's going to be about 7 percent of GDP. And with the Fed's balance sheet continuing to expand, I think it's now at about $2 trillion. With the promise of another stimulus package coming, which will be somewhere between $800 billion and $1 trillion, we are becoming increasingly dependent upon our rescuers. Now, in this case our rescuers are the American taxpayers and U.S. debt purchasers, most of them overseas. Why worry about this? Well, I think one of the reasons we have to be concerned is that eventually bond investors might begin to reconsider purchasing that U.S. debt, they might begin to second guess that. And that consequence would really be catastrophic. Avoiding such a scenario would require us, then, to take a step back from where we are and require us to begin to eliminate unnecessary spending and not go forward with compounding the problem with the deficits. But beyond the impact of the budget, there is a second concern that I have, and that's the ill effect of this bailout trend in terms of the rapidly increasing role that government is playing inside financial firms, that it's playing in the board rooms.”