Between them, Fannie Mae and Freddie Mac control 90% of the mortgages in this country. According to Answers.com there are some 44.4 mortgages in the United States. This means that the FEDERAL GOVERNMENT OWNS OR HAS LEGAL CLAIM to some 40 million homes. Let me repeat that: they own or have legal claim to some 40 million homes.
Again, according to Answers.com there are about 130 million housing units in the us.
This means that our government, at this moment, owns or controls just under one third of the homes in the US.
Further, they own in inventory some 242,000 foreclosed homes.
Now, we need to ask how exactly they got these homes. If you or I buy a house, we have to pay real money. However, the government can, in many cases, print money to achieve real claims on real property.
As an example, the Federal Reserve can purchase stock in Fannie Mae or Freddie Mac through Open Market Operations. We the American people of course don’t know when this happens, since the Fed is utterly unaccountable–or at least largely unaccountable, with some mild improvements having been made by the Finance Reform Act or whatever the recent attack on “Wall Street”, which of course is practically to say the small fry–was called. Provisions to audit the Fed, to a limited extent, are already showing up huge irregularities–things that make no sense if the Fed is to viewed as tasked exclusively with protecting the American economy–like sending huge amounts of American dollars abroad to foreign owned banks.
Consider this: what if the government, rather than trying to sell or rent the homes in its inventory, simply allowed people to live there for free? They themselves don’t have mortgages to pay. However they “financed” it, it was either put on the balance sheet of the American taxpayer, or in effect gifted to them. You could gift homes to your supporters, the ideologically compliant. You have a raffle. If there is no purchase price, it’s hard to see how that would depress home prices.
Would this not be perfectly consistent with the aims of Socialism? Framed another way, why is the Federal Government pretending to be interested in market forces?
The reality is that none of the socialists who concocted Fannie Mae and Freddie Mac as examples of the “semi-autonomous bodies within the State” Keynes dreamed of in his Fascist (Mussolini called it Fascist, and who am I to argue with the man who coined the term and invented the philosophy?) tract “The End of Laissez-Faire” want the reality of their subversion to be clear. They want to act like private sector landlords for exactly the same reason that Obama wants to call the expansion of the Federal government “investment”. This is an Orwellian term, used, as all such terms are, cynically.
Let me quote from Keynes a bit more: “I believe that in many cases the ideal size for the unit of control and organization lies somewhere between the individual and the modern State. I suggest, therefore, that progress lies in the growth and recognition of semi-autonomous bodies with the State–bodies whose criterion of action within their own field is solely the public good as they understand it, and from whose deliberations motives of private advantage are excluded.” (Chapter 4, paragraph 4).
What is he really talking about? Governmentally sanctioned bureaucracies, which have the power to make laws, but not to answer regularly to the citizenry though either elections, or direct and regular control by Congress.
There was a time when Fannie Mae and Freddie Mac were tied only indirectly the the government, by using the credit of our government–and that of the American people, who foolishly allowed this to happen–but not actual cash.
Well, they underwrote far too many loans that should never have been originated, and they failed. This has meant that many billions HAVE in fact flowed from our pockets to theirs. It also means they ARE the government, once again.
I would argue, though, that the Social Security Administration meets this criteria as well. They were set up to be outside the normal appropriations process, as I understand it. They collect their own taxes, ahandle their own paperwork, and send out their own checks. All of this happens largely without any Congressional intervention. They do periodically borrow money from the Treasury Dept., but that is not something, as I understand the matter, that goes through Congress. Congress–which to be clear is in theory supposed to best represent the will of the people, and to be the paramount authority in all domestic matters–has been removed. Medicare and Medicaid would likely meet this criteria as well, as would of course, the “investment bank” that Obama is apparently set to propose soon. That is a New Deal idea through and through. The goal is to buy political patronage, and spend money uselessly, bringing us yet closer to the brink and eventually reality, of disaster.
These are a few scattered thoughts I have not organized fully. Hopefully they are coherent enough to be useful to someone.