Bail-Outs of Freddie and Fannie Will Bury Us Under Unpayable Debt

By Devvy Kidd
“To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.” –Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39
The “Federal” National Mortgage Association (Fannie Mae) and the “Federal” Home Mortgage Corporation (Freddie Mac) are driving this country further into financial collapse. Since 1968, those two entities have operated as gigantic rip-offs called “government sponsored enterprises” or GSEs. Translated it means those companies are privately owned and operated (just like the privately owned and operated “Federal” Reserve Banking System). Freddie and Fannie have shareholders who are financially protected by your wallet. The sweat of your labor. The thieves in Congress gave them a line of credit which comes from the fruits of your labor. Those two corrupt operations are exempt from state and local income taxes and SEC oversight.
Fannie was created under FDR’s destructive “New Deal”. Because of the collapse of the housing market caused by the deliberately engineered stock market crash which led to the “Great” Depression, private lenders were hesitant to invest in home loans. Fannie was birthed to illegally provide local banks with federal money to finance home mortgages. The idea behind this criminal operation was to increase home ownership.
As Rob Alford wrote in an informative piece: “Initially, Fannie Mae operated like a national savings and loan, allowing local banks to charge low interest rates on mortgages for the benefit of the home buyer. This lead to the development of what is now known as the secondary mortgage market. Within the secondary mortgage market, companies such as Fannie Mae are able to borrow money from foreign investors at low interest rates because of the financial support that they receive from the U.S. Government. It is this ability to borrow at low rates that allows Fannie Mae to provide fixed interest rate mortgages with low down payments to home buyers. Fannie Mae makes a profit from the difference between the interest rates homeowners pay and foreign lenders charge.
“For the first thirty years following its inception, Fannie Mae held a veritable monopoly over the secondary mortgage market. In 1968, due to fiscal pressures created by the Vietnam War, Lyndon B. Johnson privatized Fannie Mae in order to remove it from the national budget. At this point, Fannie Mae began operating as a GSE, generating profits for stock holders while enjoying the benefits of exemption from taxation and oversight as well as implied government backing. In order to prevent any further monopolization of the market, a second GSE known as Freddie Mac was created in 1970. Currently, Fannie Mae and Freddie Mac control about 90 percent of the nation’s secondary mortgage market.
“GSEs such as Fannie Mae and Freddie Mae, with their combination of private enterprise and public backing have experienced a period of unprecedented financial growth over the past few decades. The current assets of these two companies combine for a total that is 45 percent greater than that of the nation’s largest bank.”
Nowhere in Art. 1, Section 8 of the U.S. Constitution does it authorize the U.S. Congress to steal the fruits of your labor, your children and grand children to fund “government sponsored enterprises.” Art. 1, Section 8 specifically enumerates only those areas where Congress may legislate and it does not give any Congress the authority to steal from you to give to someone else. Nor does the “general welfare” clause of the U.S. Constitution, which has been used by both Republicans and Democrats for decades to rob we the people blind to fund “government sponsored entities”. Instead of allowing a painful adjustment to the free market, the federal government illegally stepped in and we now have another nightmare dragging us into Hell. Well, the rooster has come home to croak
The takeover of two auto giants by the putative president with the blessing of the Outlaw Congress was illegal. Just as the takeover of Freddie and Fannie by the government is illegal. Does anyone care anymore that your incumbent and mine, are literally operating as a criminal syndicate ignoring the U.S. Constitution as nothing more than a prop when needed during an election cycle?
Well, you should care because we have passed the point of no return. There is no recovery and there will be no recovery because there are no jobs. You can thank the Outlaw Congresses over the past 15 years for NAFTA, CAFTA and GATT/WTO, which have ravaged our most important job sectors (ag, manufacturing, industrial) and sent millions and millions of jobs south of the border, to communist countries like China and South America, while Americans stand in bread lines.
My column in the last edition of the US~Observer gave you the raw and painful facts about how private pension funds are trillions in the hole and how we the people are being raped to back-stop them. The same has been happening with Freddie and Fannie. $146 BILLION borrowed dollars when the collapse happened. I say borrowed because the people’s treasury is overdrawn $13.3 TRILLION dollars as I write this column. Unfunded liabilities that must be paid are the indentured servitude taxes: social security, medicare and prescription pills (remember free prescription pills!!!) to the tune of $110 TRILLION dollars (and counting) that doesn’t exist. That equals a debt to every single person in this country of $355,000.00.
There is no money in the U.S. Treasury and our enemy, communist China, has the power to rip the rug right out from under us thanks to the decades of criminal spending by both parties in Congress.
I call them outlaws because that’s what they are – a lawless entity whether Republican or Democrat. The U.S. Congress may as well be called the Politburo. In early August 2010, Freddie Mac needed another $1.5 BILLION dollars, which will have to be borrowed since the treasury is empty. No, that’s not the end of the looting. Those two operations need about another $5 TRILLION dollars to meet liabilities. More borrowing, more unpayable debt. The American people are dead broke and with the heavy increase in taxes next year, the situation will deteriorate at a brisk pace.
Congress after Congress since 1913, with the blessing of either a Democrat or Republican president, has run us into financial ruin. The end is approaching because anyone who thinks or believes the federal government can borrow its way out of those massive numbers is either in denial or simply stupid. Americans blindly looked the other way when all these massive monstrosities were foisted upon later generations. Now, we are bankrupt and there is no turning back. As the Outlaw Congress continues to destroy the free market, they, along with the usurper in the White House, drive us closer to the abyss. No? Well, you are about to live through a very painful time in our history.
Like the illegal bail out of private pension funds, this endless pit of debt from Freddie and Fannie can’t go on and there is no simple solution:
“Fannie Mae and Freddie Mac have become gigantic financial black holes that the U.S. government endlessly pours massive quantities of money into. Unfortunately, if the U.S. government did allow Fannie Mae and Freddie Mac to totally implode, both the mortgage industry and the housing industry in the United States would completely collapse. So essentially, the U.S. government finds itself between a rock and a hard place. Prior to the financial crisis of the last few years, Fannie Mae and Freddie Mac were profit-seeking private corporations that also had a government-chartered mission of expanding home ownership in America. But now that they have been officially taken over by the U.S. government, they have become gigantic bottomless money pits. It is hard to even describe just how much of a mess Fannie and Freddie are in. However, the unprecedented intervention by Fannie Mae and Freddie Mac in the mortgage market over the past couple of years has been about the only thing that has kept it from plunging into absolute chaos.” [1]
So, illegally steal from the people to keep the mortgage market from chaos? One hell of a mess, wouldn’t you say? The crooks in Congress who have allowed this to continue will never be held accountable as in going to jail. Judicial Watch, one of the most effective government watchdog groups in America is uncovering the fraud and players, but it is a long process. [2] While a few honchos at Freddie were fired back in 2003, the collusion between members of the Outlaw Congress, sitting presidents, Wall Street and those two entities is nothing but an incestuous relationship. A relationship that cannot be sustained without the continued raping of we the people, until we are consumed in debt and inflation.
In 2011, another 1.65 million homes will go into foreclosure. Another 20 million will go underwater with untold numbers of homeowners simply walking away. The Outlaw Congress refuses to pass H.R. 4759 to get the US out of NAFTA and bring hundreds of thousands of jobs home from south of the border. The Outlaw Congress refuses to get us out of the GATT/WTO which would bring home millions of jobs. Why? Because the major multi-national (no longer American) companies buy the favors of the Outlaw Congress; they are also afraid of commie China who they have to beg from to borrow more debt.
About 11.5 million jobs are now being held by criminals (illegal aliens), while a whopping 42 million Americans are now on food stamps. The real unemployment number is just shy of 26 MILLION, yet the political animals in Congress bicker over protecting illegal aliens who have stolen millions of jobs that belong to Americans, while the corrupt Department of Justice sues the State of Arizona.
If we had real constitutionalists serving in Congress, the work of down-sizing the government and getting rid of all unconstitutional cabinets like the Federal Department of Education and the EPA, along with stopping all illegal foreign aid and abolishing illegal operations like USAID that continue to rape we the people for hundreds of billions of dollars that have to be borrowed, would become a reality. Unfortunately, too many incumbents like John Boehner [R], Jim DeMint [R], Steny Hoyer [D], Carolyn McCarthy [D] and so many others will get re-elected in November. Those incumbents have never introduced the legislation to kill the cancers devouring us. The Republicans had control of Congress for 14 years, 8 with a Republican president. All we saw were more Band Aids and massive spending. When the Democrats took control in January 2007, they simply accelerated the spending spree, enslaving us and our children. There’s an old saying: If you don’t get it before marriage, don’t expect it afterwards.
There’s no way to sugar coat what is coming. I have been an activist in the trenches full time for the past 20 years. Those of us who have done the research, understand fiat currency and what happens when a government spends itself into unpayable debt, have know this day was coming. There has been a massive surge in raiding what’s left of people’s 401(k)s to buy food, pay bills and stall foreclosures. Good bye “old age” nest egg. But, it’s all worthless paper. I can only say that those who do know what’s coming are buying gold. When the Weinmar Republic (Germany) collapsed in 1933, the people burned Reichmarks because it was cheaper than wood.
In order to stave off the inevitable, the “FED” is about to do something called quantitative easing. That means more worthless paper printed and pumped into the economy. The result will be more debt for you, me, our children and grand children. What is QE?
“A central bank does this by first crediting its own account with money it has created ex nihilo (“out of nothing”). It then purchases financial assets, including government bonds and corporate bonds, from banks and other financial institutions in a process referred to as open market operations. The purchases, by way of account deposits, give banks the excess reserves required for them to create new money by the process of deposit multiplication from increased lending in the fractional reserve banking system. The increase in the money supply thus stimulates the economy. Risks include the policy being more effective than intended, spurring hyperinflation, or the risk of not being effective enough, if banks opt simply to pocket the additional cash in order to increase their capital reserves in a climate of increasing defaults in their present loan portfolio.” [3]
Of course, it will do nothing towards creating jobs. Any bank that practices sound policy isn’t going to lend to a borrower who has no job or multiple bankruptcies. The backbone of America’s employers, small businesses, aren’t hiring because they don’t know what will come out of Washington, DC next and the taxes from illegal “laws” like Commie Care (Obama Care) are already causing layoffs. Americans aren’t spending because they are afraid of the future, which in turn, hurts local economies. Prepare yourself, America. The worst is coming.
just type in the caption below and the article will appear.
[1] 5 Trillion More Dollars To Fix Fannie Mae And Freddie Mac???
–The Economic Collapse
[2] Why is Washington Ignoring its Biggest Corruption Scandal?
–Tom Fitton
[3] What is Quantitative Easing?
–Business Insider
Devvy Kidd authored the booklets, Why A Bankrupt America and Blind Loyalty; 2 million copies distributed. Devvy appears on radio shows all over the country. She left the Republican Party in 1996 and has been an independent voter ever since. Devvy is a constitutionalist who believes in the supreme law of the land, not some political party. Visit Devvy’s website at: http://www.devvy.com. You can also sign up for her free email alerts. Devvy’s radio show broadcasts Mon-Friday; for details go to Devvy’s site.