Sunday, September 07, 2008
Bankrupting America: Bailing out Fannie and Freddie will cost us $25 Billion, we are told our debt is $9.6 trillion but it is really $53 trillion!
Fannie Mae and Freddie Mac together hold or back half of the nation's mortgage debt, and have played an increasingly important role in the real estate market since the credit crisis started in August 2007. A government bailout could cost taxpayers around $25 billion, according to the Congressional Budget Office. Treasury Secretary Henry Paulson and two other regulators are working on a plan to put the troubled mortgage finance companies into a conservatorship, and remove Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron, according to Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.
News of the likely government takeover Friday followed a report by the Mortgage Bankers Association that more than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June. That confirmed what investors saw in Fannie and Freddie's recent financial results: trouble in the mortgage market has shifted to homeowners who had solid credit but took out exotic loans with little or no proof of their income and assets. In July, Congress passed a plan to provide unlimited government loans to Fannie and Freddie and to purchase stock in the companies if needed. Critics say the open-ended nature of the rescue package could expose taxpayers to billions of dollars of potential losses. $25 Billion is a minimum
* I could have sworn I posted a couple weeks ago that the Debt ceiling was increased again to 10.5 Trillion or there about but I will use the reported $9.6 trillion figure that is in itself over whelming to our future as Bush has bankrupt America's future and the future of our children in his "success" McPalin wants to continue in this new Fascist America! However sadly $9.6 trillion is a bad joke compared to the debilitating truth that in fact America is $53 Trillion in Debt!
In the terrible reality The country is in a $53-trillion financial hole, but few of the nation’s leaders — including the two leading presidential candidates — are willing to grapple with it. So said former U.S. Comptroller General David M. Walker, who plays a key role in a new documentary film about the nation’s debt problems. Besides an $11-trillion debt, the country is also saddled with $34 trillion in unfunded Medicare promises, $7 trillion in unfunded Social Security promises and $1 trillion in miscellaneous debts, Walker said at an economic summit at Bryant University in Smithfield.
The total — $53 trillion — is the equivalent of $175,000 in debt for every man, woman and child in the country, Walker said. Federal budget controls expired several years ago and now, “Washington is out of touch and out of control,” he said. But even if the annual federal budget is balanced, the overall debt will continue to grow — automatically — unless voters hold elected leaders accountable and demand solutions, said Walker, former head of the U.S. Government Accountability Office, the watchdog arm of Congress. “America is at a crossroads,” he said. “We have much to be proud of and much to be thankful for, but we have strayed” from the nation’s founding core values.
Voters should demand that candidates for elective office acknowledge the $53-trillion problem, change the nation’s tax policy and address entitlement programs such as Medicare and Social Security, he said. He added that the nation must no longer write a “blank check” when it comes to health-care costs. “If we don’t get health-care costs under control, we will bankrupt this country,” he said. Walker also told about 230 business leaders, academics and others at the summit that “too many Americans are following the bad example of the federal government — spending more than they make.” It gets worse!
That brings back to the movie and Documentary I. O. U. S. A.! When leaving the theater after seeing I.O.U.S.A. -- the documentary billed as doing for the national deficit what An Inconvenient Truth did for global warming -- you'll likely be confronted with one of two impulses: You'll want to cut up your credit cards on the spot, lecture your kids on the meaning of frugality and call your representative and senators for a heart-to-heart about federal spending -- or you'll feel like throwing in the towel and learning how to say, "Do you want fries with that?" in Chinese.
I.O.U.S.A. delivers the goods with plenty of jaw-dropping figures. In 2007, China had the largest trade surplus of any country in the world, at $262 billion, while the U.S. had the greatest trade deficit of all nations, at $847 billion. At the end of World War II, nearly all federal debt lay in the hands of Americans, but by 2007 foreigners owned 45% of our obligations. As for what's occurring within our own borders, if current trends continue, the total federal debt will skyrocket to 250% of gross domestic product around 2040. The ratio of the nation's outstanding debt to GDP is 63% now.
** Creadon nabbed some big names to weigh in on the cause. Former Federal Reserve Chairmen Alan Greenspan and Paul Volcker give interviews, and former Secretary of the Treasury Paul O'Neill offers a disheartening account of his dismissal from office after butting heads with the Bush administration. He recounts Vice President Dick Cheney telling him, "We don't have to worry about deficits." Please read between the lines and maybe watch the terrible truth!
* You have to wonder what Cheney's terrible plan is when he can say we do not have to worry about Deficits? Does the idiot think we can file Chapter 11? Is it because of the plan for a North American Union? Attacking China winning and eliminating our Debt? What the hell is going on in Washington's little minds? My own thought is they purposely bankrupt our America because their new Fascist America is almost ready and a new Monetary system will be instituted. I can only anticipate with trepidation this facade of an election in this facade of a Democracy and beyond that January 20th when Bush and Cheney's rule is "supposed to be over"