Brooks Cosponsors Bill to Protect American Taxpayers from Failing Out Bankrupt Detroit

Statement

Today Congressman Mo Brooks (AL-05) co-sponsored the No Bailouts for State and Local Governments Act. The bill protects American taxpayers from being forced to bail out financially irresponsible state and local governments that go bankrupt. The bill prevents the U.S. Treasury from acquiring bankrupt government assets or obligations and blocks the Federal Reserve from providing funds or other aid to state and local governments in financial distress.

Congressman Brooks said, "I am startled to hear more and more people and groups clamor for a federal government bailout of a bankrupt Detroit. The Federal Government must use taxpayer money wisely. The same spend-as-if-there-is-no-tomorrow financially irresponsible mentality that forced Detroit into bankruptcy is putting America at risk of its own debilitating insolvency and bankruptcy. The federal government cannot afford to borrow money to give to state and local governments that fail to make the tough financial decisions that are necessary to avoid bankruptcy. Bankruptcies in Detroit and Stockton, coupled with the financially precarious condition of state governments such as Illinois and California, must be a wakeup call to all Americans to reign in irresponsible federal, state, and local spending."

Brooks added, "No offense to Detroit, Stockton, and the numerous other local and state governments that are in financial distress, but the federal government simply cannot let financially self-destructive behavior be the anchor that drags America down into financial ruin."

Brooks continued, "Cities like Detroit and Stockton have knowingly and recklessly squandered their resources. Neither they nor their citizens have any moral standing to be bailed out with the largesse of the American people. Americans don't pay taxes to bail out governments that don't prudently govern. The plight of Detroit and Stockton should teach all governments to understand the importance of making sound financial decisions, and the destructive consequences that await them if they fail to live within their means."

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