Clearly, the politicians had to “Shore Up Fannie Mae and Freddie Mac,” as the NYT headlines today. The risk of not stepping in was just too high.
But the paper, and every other bit of coverage, also notes:
While senior Democratic and Republican officials in successive administrations have for many years repeatedly denied that the trillions of dollars of debt Fannie and Freddie issued is guaranteed, the package, if adopted, would bring the Treasury closer than ever to exposing taxpayers to potentially huge new liabilities. The two companies could face significant new losses this year as the wave of housing foreclosures continues. Officials seemed to suggest, however, that they had little choice but to intervene.
Think about it for a minute. These officials were deliberately lying to you, to all of us. They knew perfectly well that they and Congresses run by both parties had created a situation in which there would be no choice but to bail out these monster companies.
We are all on the hook for billions, maybe a trillion or two, that we simply do not have. Our kids and grandkids will pay for this, unless we start dealing with reality right now by requiring some sacrifice from the basest generation, the baby boomers whose selfishness — and willingness to allow corporate corruption on a mega scale — has brought us to the edge of financial catastrophe.
And the politicians have led the parade with false promises and outright lies. We insisted they do this, or so they believed, and they responded as they normally do.
American could soon be in an Argentina-like meltdown. When you look for people to blame, if you’re older than 30, start by looking in the mirror.