Lloyd Bentsen: “this is a penny-wise and pound-foolish amendment that is based on a flawed understanding of classical economics, and it…”

“this is a penny-wise and pound-foolish amendment that is based on a flawed understanding of classical economics, and it actually has some tinges of mercantilism. It believes in a perfect world, and the fact is it is not a perfect world. When we look at the facts we will find that the United States provides export subsidies amounting to about 3 percent of our exports, but the rest of the world, or many of our trading competitors, provide anywhere from 20 to 40 percent subsidization. So we are already dealing at a disadvantage in that case. Second of all, this theory that this is somehow where the private sector would go is, I think, very flawed as well. Because what we are talking about is lending the credit of the United States under a very controlled program, with losses that the gentleman from Nebraska pointed out are lower than most American mortgage pools are, and the recovery rate better. The fact is the private sector will not go into these areas. If we are going to start believing in this theory, let us not stop here. Let us go after student loans and FHA, because that is the same theory as we are applying in that case. Do we really want to walk away from emerging markets and have U.S. businesses walk away from that? There is no proof whatsoever, no proof provided by Americans for Tax Reform, or any other group that we have asked for, that there is crowding out of the market.”