Wednesday, September 10, 2008
I'm sure that most of you have heard about the massive government bailout of the financial institutions of Freddie Mac and Fannie Mae. Both of these mortgage lenders have somewhat of an identity crisis. Are they part of the private or public sector? The answer is both. As Neil Cavuto points out in a transcript from his show "You're a private entity, so you can make money. Or you're a public entity, so you can't fail. Turns out you can't make money. And you can very much fail."
So how is it going to effect you, the taxpayer? Well, Neil states that the bailout is going to cost the government more than $400 billion. This adds even more debt to the huge national deficit number they are always talking about (which stands around $10 trillion as of now). Neil goes on to say that the tax cuts that both presidential candidates are promising are basically dead. While I don't know about the validity of that statement, I do know that I don't like paying someone else's mortgage note.
I don't know for sure, but after hearing this I think that government bailouts might be a bad idea. At least one presidential candidate is looking to change this practice. Of course, it's also good to know that Chuck Norris agrees with me.