The poster children for term limits (i.e. US Congress) just passed a bill to bail out delinquents and it was signed by the fakest fiscal conservative we ever elected, our President.
This will show to have been a wildly expensive and unwise program. the underlying problem – houses being too expensive for someone with an average income – has not changed. Prices need to decline from 10-25% in some areas more to get equilibrium in the real estate market. In the meantime, the government has prolonged the correcting process that is necessary to clean out the excesses of the recent credit boom. Here’s one person trying to make people aware:
We all should become more aware of what happened and determine our opinions. What is happening increasingly is that institutions that are supposed to handle their OWN risk are being bailed out by the government using YOUR tax dollars.
Understand that the US government was not required to “back” Freddie and Fannie. This makes me laugh because I remember all of those licensing exams and continuing education programs where we were taught that there was only an “implied” guarantee on Fannie Mae and Freddie Mac Bonds. In other words, the government did not directly guarantee them but since they were quasi-government organizations, everyone thought the government would back them – guess my exam material was correct.
By bailing out these two, Bear Stearns, and giving the Treasury $800B to bail out other institutions, the government is using your tax dollars to protect PRIVATE organizations from loss – so if you’ve heard people saying “privatize the profits but socialize the risk,” you now know what they mean.
All I ask of you is be aware of what is really going on, read the legislation that was passed and vote accordingly. Citizen action is needed now. Oh and if you are OK with using your tax dollars to bail out these companies, then certainly feel free to do nothing.
Chris Grande
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