Congressman Ron Paul says the Bush administration is trying to 'perpetuate the bad policies' that have created the US financial crisis.

Speaking to CNN's Late Edition on Sunday, Congressman Paul said President Bush's proposal to allow the federal government to spend up to $700 billion for purchasing bad debt is a 'mistake'.

The White House seeks to shore up the financial system with a plan that if endorsed, would be the largest government buyout of the private sector in US history.

A draft of the proposed legislation, which Congress has been urged to quickly pass, gives sweeping powers to the US Treasury, allowing the purchase and sale of mortgage-related securities in any way the department sees fit.

"Well, I think that's a mistake because we don't have the money," Paul said.

Paul, a member of the House Banking Committee, said the US Congress must instead seek an alternative directed at reforming the system and balancing the budget.

"We could change our foreign policy. We could take care of our people at home. We could lower taxes… the worst thing that we can do is perpetuate the bad policies that gave us this trouble in the first place," he expounded.

In recent weeks, US firms with some 3.4 trillion dollars in money market funds have been hit by dramas that have brought many financial giants to their knees.

Bush's rescue plan, meanwhile, will provide no oversight of the bailout's management, barring all courts and agencies from reviews.

Since announcing the package on Saturday, Treasury Secretary Henry Paulson has held many interviews, claiming that the plan needs to be passed 'quickly' and relatively intact to stem damage to global financial markets.

Congressman Paul, however, suggested the estimation that $700 billion of taxpayer dollars could fix the damage as pure fabrication.

"When the war started in Iraq, they said we needed 50 billion dollars," Paul recalled - analysts have now calculated that the ongoing occupation of Iraq will cost up to $1 trillion.

Should Congress OK the rescue package, the national debt will amount to $11.3 trillion.

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