Friday, February 15, 2008
"It's been highly touted as an economic stimulus bill that will help millions of Americans. ... As part of the bill, Congress is set to rush through an increase in the mortgage loan limits for Fannie Mae and Freddie Mac (and Federal Housing Administration insurance, too) from $417,000 to $729,750--the first step toward a massive financial diasaster in which taxpayers will end up paying through the nose. ... Now, thanks to Congress, junk bond investors will be able to pawn off their bad debt to Fannie and Freddie, instead of suing the big investment houses for ripping them off. ... Expansion of Fannie and Freddie's reckless lending is exactly what Congress wants because it's plausibly deniable. ... Those same lawmakers won't mention the fact that they get paid far more by real estate lobbyists than they do from our Treasury. ... It's like some sort of upside-down communism where the poor pay the rich welfare. Why should taxes from families earning $48,000 a year be used to support expensive mortgages in New York, Los Angeles and San Francisco? Welfare for the hungry and homeless is evil, but welfare for million-dollar homeowners facing a tough refi ... well, that's called 'helping the economy'," Sean Oleander (SO) at http://www.sfgate.com/, 3 February 2008.
Thanks, W.C. Varones (WCV) for leading me to SO's article. I agree completely, quoting Mao on occassion. There's no other way to explain this. WCV's post at http://www.wcvarones.blogspot.com/ on 3 February is critical of this government policy. No, Hank Paulson, we're not all fooled.