Fannie and Freddie Uncapped

By Douglas V. Gibbs

Fannie Mae and Freddie Mac are GSEs. GSEs are Governmental Sponsored Enterprises. They were created by Congress to assist in keeping money flowing from those who have it to those who are asking for it, essentially providing liquidity to the mortgage market. These entities gave the federal government a portal into the private sector, and allowed the GSEs to hold a monopoly on the secondary mortgage market.

Through the GSEs, and the federal reserve, the federal government imposes its will on the banking industry, while claiming Fannie and Freddie to be private entities. Through the secondary mortgage market the federal government is able to keep the private sector on a short leash. This is part of the reason the feds were so quick to want to bail out the GSEs. Without them, manipulation of the market would be more difficult.

The GSEs have been a topic for corruption in the past, and it was no surprise when they ran into trouble. Under the pull-strings of the federal government a housing bubble was created, and despite the warnings by George W. Bush and the Republicans during Bush's first term, and early on in his second term, that Fannie and Freddie were headed for a collapse, the leftists continued to proclaim that the GSEs were too big to fail.

As predicted by conservative economists like Peter Schiff, the housing bubble burst, and the economy found itself in a downward spiral.

If, at the early moments of the economic downturn the free market forces had been allowed to adjust naturally, the recession would have never commenced, and the unemployment rate would not have jumped to double digits. Large failures like AIG, and the GSEs, would have collapsed, and smaller players would have filled the void as lenders began to prosper under new clear skies devoid of the government's iron fist through the GSEs. Instead, the Democrats began running around in circles screaming we were headed for the worst depression since the Great Depression, tried to create a panic with their fear-mongering, and demanded that our economy's only salvation was for government to spend untold trillions, and to gain fascist-like control over the private sector.

Failed entities were saved with bail-out money so that they could continue to practice their failed policies, and as a result our economy is tanking further, our national debt is rising at an unprecedented pace, and our choices (a.k.a. liberties) are being plucked up by the federal government through policies like Cap and Trade and the Health Care legislation under the guise that it is good for us, and for our own good - when ultimately the policies kill liberty, and enslave the people.

Pelosi has requested that the federal borrowing limit be raised, and the U.S. Treasury has unconstitutionally (unconstitutional because only Congress can make such decisions) eliminated the cap for how much funds can be fed into Fannie and Freddie.

How far will this go? How many times will the federal government ignore the Constitution as they continue their quest of bankrupting the country? We are seeing wage controls and price controls being imposed on bailed out corporations - how long before those Marxist policies like those limits are applied across the board? How long before America stops being the land of opportunity, and becomes a Marxist state enslaving the people with radical socialism?

How long?

A revolution is rising. In 2010 the leftists will lose in a landslide. The big question is, have the Republicans learned their lesson? Or will they continue to ignore the need for Constitutional-style leadership? How long before they return to their roots, and work to move America back to the Constitutionally based idea of a small federal government?

The lessons being learned by handing the reins over to a bunch of socialist radicals will be wasted if we don't turn this mess around with conservatism.

-- Political Pistachio Conservative News and Commentary

US uncaps Fannie/Freddie support, announces during Christmas holiday - Hot Air

Democrats to seek higher limit on the federal debt - Washington Post

Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis - You Tube