in Musings, Rant

Fannie and Freddie are our problems now

I laugh at the types who always say “keep government out of healthcare” and “we need deregulation! Let the markets decide!” They’re often the ones who are screaming the loudest for bailouts when Wall Street titans like Bear Stearns, Fannie Mae and Freddie Mac come crashing down. Regulation is evil until these big companies lose their shirts. Then they come running to Uncle Sam.

On the news the other night, a man chased out of New Orleans by Hurricane Fay was complained about the cost of evacuating. “That’s $400,” he said, frowning. “That I don’t have.”

The takeover of Freddie Mac and Fannie Mae is $500 billion that we don’t have, folks. And the debt held by the two is $5 trillion. That’s $5,000,000,000,000: half the national debt!

I’m sick and tired of banks getting a free ride while American taxpayers getting the bill. We shouldn’t be on the hook when the banks’ gambling debts come due. If you’ve been flying high on debt and living above your means, don’t come crying when the bills come due. Don’t buy things you can’t afford and don’t use my tax dollars to cover your losses.

  1. “Privatize the profits, socialize the risks!” It’s the new capitalism!

  2. Yes, their debt is $5 trillion. However, the VAST majority of that is from good mortgages that will be repaid. All the people (yes, you included) that mention that number without the aforementioned caveat are simply fear mongering.

    But, yes, agreed that the federal budget is way out of wack. In fact, I would rate that as the number 1 problem affecting the US today and put it WAY above foreign terrorism.

  3. It is interesting; but, even more interesting is that the managers of these institutions seem to be getting a free ride out of town on a multimillion dollar parachute. The most detailed explanation of how we got here has been, “They had too many high risk investments.”

    These guys should at least shoulder as much blame, derision, and shame as I feel when Suzzanne discovers that I’ve screwed up the check book.

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