Update, Sept. 20, 2008: It’s now even worse than when I wrote this a couple days ago. Today President Bush has announced that he’s asking Congress to take $700 billion more of your money to pay off bad mortgage-related assets. This will be another crushing blow to the national debt and to the whole concept of personal responsibility, individual liberty, and limited government.
Within the past few days, the national debt – that huge colossus of future pain waiting to gobble up everything in the end, the accumulated burden of decades of fiscally insane policies, the vast cesspool from thousands of corrupt politicians and cronies over half a century – was simply doubled (in effect) in an instant by a tiny handful of men. It was done without a Congressional debate and vote of our elected officials. It was done without public oversight. It was done without the least shred of Constitutional authority. Two companies, Fannie Mae and Freddie Mac, sought to avoid the disastrous fruits of their questionable labors. These companies, after pouring hundreds of millions of lobbying dollars into Washington D.C., were able to simply turn their incredible debt over to you and me. Their debt is now yours. Bon appetit. The Economist had this sober comment about these two institutions back on July 14, 2008:
FANNIE MAE and Freddie Mac, the two government-supported mortgage giants at the centre of America’s housing market, pose a particularly acute problem for the Bush administration. Not only are they too big to fail. They are almost too big to rescue.
They hold or guarantee some $5.2 trillion of the nation’s $12 trillion of mortgages, backed by the thinnest wafer of capital, meaning their collapse would imperil the already paralysed American housing market. Yet as Joshua Rosner, an analyst at Graham Fisher, a research firm, points out, nationalising them, a stark choice for the government since their shares tumbled last week, would “result in a doubling of the federal deficit, a further collapse of the dollar and unthinkable implications for the Treasury’s cost of funding in the debt markets.”
This was done by a secret government involving the likes of the former CEO of Goldman Sachs, now the Secretary of the Treasury, and the Federal Reserve Bank, an unelected, unaccountable institution that has never been subject to an independent audit and is clearly contrary to the intentions of the Founding Fathers. They rule – and they decided that they needed to bail out some of their friends, at your incredible expense. Other bailouts of financial institutions have followed, removing the curative power of failure in allowing bad companies to reap the rewards of their greed and corruption. We will bail out many more organizations, allowing the government to take them over. It’s nationalization of industry. It’s national socialism, coupled with the insane deficit spending and inflationary policies that brought down the Weimar Republic and other nations.
While these unelected officials continue their power grab over financial markets and carry out the most fantastic looting of a nation in the history of the world – stealing trillions of dollars from you, me, and our children, all in the name of “preserving confidence” and “for our own good” – the American people have been deluded into thinking that this is healthy. They feel grateful for the bold actions that their wise leaders are taking to help them out.
It’s like the people in Noah’s time being grateful for the bounteous water supply that is coming their way.
What’s happening now, this week, this month, seems monstrously different than the corruption we’ve seen in past generations. It’s dreadful. I don’t mean that financial disaster will sweep this nation soon (though it could), but it is our liberty where the real disaster is. Unelected men seizing vast amounts of power and wealth. This isn’t good. It’s a tsunami of corruption and debt.
But on the plus size, the Packers are having a great season, and I’ve officially become a Packers fan. So it’s all good. Go Pack!