Republican U.S. Senate hopeful Peter Schiff got an enthusiastic response Monday from Bristol Republicans who listened to his harsh rejection of what Democrats are doing in Washington.
Schiff, a wealthy financial advisor, said the government's vast deficit spending is "sucking all the lifeblood out of the private sector."
He said that senators are "completely clueless" and fail to recognize they "are being lied to by Wall Street" about the best way to respond to the economy's troubles.
Schiff told the GOP's town committee that the problems that caused the economic collapse were all rooted in national politics. He blamed the Federal Reserve for making borrowing too cheap and government agencies for insuring housing loans that would never have passed muster if the private sector had been forced to look closely at them.
He said he's made his money "trying to protect the wealth of my customers from the destructive policies coming out of Washington."
Schiff, who's locked in a three-way battle for the right to claim the GOP line in this year's Senate race, said that because of federal money policy and too much regulation, "Free markets weren't allowed to function."
That's why they ground to a halt in September 2008, he said.
Schiff said that U.S. Sen. Chris Dodd's financial regulation bill "doesn't do anything to address" the underlying woes that caused the crisis. Instead, he said, it just adds more red tape.
"We are making the problems worse," he said.
Schiff said that during the past decade, the volume of regulations covering financial institutions has grown substantially, to the point where it is "unreal." It's getting so hard for anyone but the largest banks and finance firms to comply with the rules that forming new businesses is becoming all but impossible.
Schiff said he never could have set up his own shop with today's red tape.
His main concern, though, is an out-of-control federal deficit that has reached $12.5 trillion and is heading for $14 trillion by next year.
To pay the interest on that debt today is possible, he said, only because of policies that have held interest rates in check.
But when interest rates rise, Schiff said, the government won't be able to pay back the money it owes.
"Where are we going to get that money?" Schiff asked.
He said the government will only have two choices: default on its obligations or rely on inflation to undermine the money, "which, unfortunately, is exactly what we['re going to do."
Schiff said that the high-tech bubble's burst a decade ago at least left us with some interesting new companies and technologies. When the housing bubble burst a few years ago, at least we had some new houses to show for it.
Now, he said, we're in the middle of a "government bubble" that will leave us with nothing at all when it bursts.
"Nothing is getting better. We are digging ourselves into a deeper hole," Schiff said. "We can't keep spending and regulating the economy and expecting it to survive."
Schiff said he would block further efforts to spend money the government doesn't have.
He would also, he said, take the hard steps necessary to shave spending.
"The problems cannot be solved without pissing people off," Schiff said.
He said the Congress has to begin to do the right thing "before it's too late."
Unless it acts soon, Schiff said, "they'll wipe out the savings of an entire generation."
If he's elected and can get 39 others to join him in the Senate, "we can shut down the government."
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