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  • Government Staying in the Mortgage Business

    Despite their key role in creating the housing crisis, Fannie Mae and Freddie Mac are not being reformed, and will continue to cost the American taxpayer huge sums of money for the foreseeable future. There will be a housing summit on Tuesday, but its already clear that the federal government will remain in the mortgage business, despite the scandals that have emerged. Bailouts of the mortgage giants have already cost the taxpayer $111 billion, and the Congressional Budget Office projects they will cost another $290 billion this year alone. (This is not counting the interest that will have to be paid since this money is borrowed.)

    Sometimes it’s hard to even comprehend numbers this large, so a breakdown of this cost using the Center of Data Analysis Individual Income Tax model may be useful. About 44 percent of federal revenue comes from individual income taxes. 44 percent of $111 billion and $290 billion is still large enough to constitute a fair little chunk of personal income tax paid. This is how it breaks out by demographic group.

    Such a huge cost, and for what? To bail out and subsidize companies that, along with $120 billion annually in housing tax breaks, drove a bubble in housing that has nearly taken the economy down with it.

    Methodology here.

    Posted in Economics [slideshow_deploy]

    3 Responses to Government Staying in the Mortgage Business

    1. Bobbie says:

      I'd like to know why the federal government sees irresponsible over responsible people. WHERE'S THE EQUALITY? The government doesn't correct ANYBODY'S IGNORANT CHOICES CALLED IRRESPONSIBILITIES. They unfairly put the burden on the responsible instead of holding the irresponsible accountable.

      THE GOVERNMENT IS PROMOTING IRRESPONSIBILITY, protecting those accountable to be held unaccountable.

      For those that work to own their home, you would be taken by some of the beautiful newly built homes the responsible is mandated to pay, for those PERSONALLY IRRESPONSIBLE CHOICES FANNY AND FREDDY AND GOVERNMENT ARE PROMOTING…

      The predatory lending is NOTHING BUT BS! we made the decisions we could afford no matter how tempting the offer to borrow more. My point is we weren't forced to take more even though offered. We had no background experience, just like the irresponsible. We took it as the most important decision and responsibility of our livelihood. Seems the irresponsible took advantage, with government help.

      There's no way this country will make it with the majority of Americans using government and the innocent sector, to make up for their irresponsibilities!

    2. Tim AZ says:

      Cheer up Bobbie it's going to get worse. They're creating a new housing bubble to burst. It seems the last one just wasn't as destructive as they had hoped it would be. Does anyone feel like the red headed step child in a never ending cycle of abuse?

    3. Bobbie says:

      Thanks, Tim,

      I guess it's a stretch, but I'm hoping people will see the weight of destruction and discrimination in what they are doing to this country by government provocation. I'm hoping they rise above government and take on their own freedom of fulfilling their own "wants" and "needs" instead of giving into government dependence.

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