By Tim Krohn
NORTH MANKATO — U.S. Sen. Norm Coleman said the massive government bailout of failing financial institutions is not only necessary but could make money for the federal government.
“The government could make 10 or 20 times what it pays on this, possibly,” Coleman said during a campaign stop at Christy’s Cafe in North Mankato Saturday morning.
Coleman said the government takeover of Freddie Mac, Fannie Mae, AIG and others was necessary but said “I worry a little bit,” about the government spending perhaps a trillion dollars or more to shore up failing financial institutions.
One of the dozens of people who showed up for the event asked where the money would come from if Coleman stayed true to his pledge not to raise taxes.
“It’s not an infusion of cash,” Coleman said. Instead, he said the government is incurring “shorter-term debt” through borrowing.
Coleman said the government could purchase bad housing loans and other assets from companies for 10 or 20 cents on the dollar and if those assets increase in value in the future, could profit.
Coleman also said preventing such an economic catastrophe in the future would require more “cops on the streets” to regulate financial institutions. Asked by another person in attendance if that meant he supported more funding for regulatory agencies, Coleman said: “Regulation’s not the only solution,” and said more “transparency” is needed in financial transactions.
“Our economic system is like our security system was pre-9/11. We have a regulatory system from the ’50s.”
Coleman said the current economic breakdown is the worst he’s seen in his 35 years in public office and said the root of the whole problem was low interest home loans given to people with no down payments. “It was greed.”
Coleman, a Republican being challenged by DFLer Al Franken, said he supports an energy policy that includes everything from conservation and renewables to more oil drilling in the United States and more nuclear power.
He said he supports a health care plan that provides access to affordable health care for every Minnesotan, but not one operated by the government.
When a supporter suggested he should push Congress to take no pay increase or per diem increase for the next four years to show solidarity with struggling Americans, Coleman’s answer was qualified.
He said public servants, including members of Congress, deserve a reasonable pay raise, but not special treatment.