Former Republican U.S. presidential candidate Ron Paul says he opposes the proposed $700 billion financial industry bailout bill as "bad for the taxpayers."

Paul, a U.S. representative from Texas and member of the House Financial Services Committee, told CNN Wednesday that buying illiquid mortgage-backed derivative securities from Wall Street investment houses would only continue a series of poor financial decisions.

"I think it's a bad bill. I think it's bad for the taxpayers," Paul told the broadcaster. "I think it's doing more of the same thing. The same policy that we're following now with this bill is exactly how we got into that trouble."

Paul said government should step aside and let the market continue to price houses downward, wringing out unrealistically high prices, rather than encouraging them to remain artificially high through intervention in the financial markets.

"If there are too many houses and the prices are too high, the sooner we get the prices down to the market level, as soon as we quit trying to encourage more housing -- this is what we're doing," he said. "They're trying to stimulate houses and keep prices high. It's exactly opposite of what we should do."