So the Senate just passed a bill (already passed by the House of Representatives) that allows the government to offer billions of dollars to two major lending corporations: Fannie Mae and Freddie Mac, among other provisions of the bill. The President is expected to sign it early next week. (Interesting that the Legislature works on the weekend, but the President doesn't) Anyway, I was a little concerned about this "bailout bill" because it gives these two corporations a free pass from bankruptcy with few strings attached. Freddie Mac and Fannie Mae, the nations two largest lenders who account for more than half of the $12 trillion dollars in the mortgage market, have gotten a really good deal out of this. They were able to make themselves rich before the housing crisis by sepculating lenders and greedy homeowners. Then, when trouble hit, they had the audactiy to go to the government and say "Please, help us." And the federal government obligingly responded (I'm sure it has something to do with the billions of dollars spent on lobbying legislators each year by these two companies). Now, they can take advantage of the "bailout bill" and let the federal government "save" them while they make even more money now and in the future.
So what do we end up with? Bigger government, a precendence for government bailout, higher national debt threshold (from $9.5 trillion to $10.6 trillion with the passage of this new bill), and richer executives at Fannie Mae and Freddie Mac. Was it worth it?
I guess some good things that came out of this was the salvation for first-time homeowners and the increase in flexibility for Section 8 low-income housing vouchers. Hoping to be a first-time homeowner myself in the future, I am grateful for the government "having my back." Although, I would like to think that I wouldn't get wrapped up in a home that I couldn't afford and then when trouble hits, depend on the government to bail me out while I maintain my lifestyle of frivolity and greed.
*For further information, read your newspapers ;)
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2 comments:
I just can't figure out how you know so much...you always throw out these terms and facts that came from who knows where!! You just leave me in the dust with your intelligence.
Then, my ruse has worked if you think I "know so much."
I guess I have actually learned something from all these years of school, huh.
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