Fannie & Freddie Corrupted : More Progressive Sickness

More slight of hand from our 'betters' in Washington. Is there anything that we can believe these days that comes out of the Obama administration and the progressive socialist democrat party? If past history is any guide, the answer is no.

Deceit and out right lies are the very basic fundamentals of progressive socialists democrats. An ideology of manipulation through misinformation. The Obama administration has a track record of corruption that is unrivaled in our history. At no time in our history has one person and one political party taken such an active role that willingly and actively seeks the destruction of our way of life.

And it's not just Fannie and Freddie that being used to corrupt the intelligence of the public, it's an internal rot in all aspects of progressive government, both economic policy and foreign policy.

To understand the progressives socialist liberal democrat party is to understand an ideology of single minded and self-serving corruption. This is not new as they have been infesting all aspects of our lives for decades, it's only now with Mr Obama as our leader that they have decided their time has come to take what they believe is theirs by right, total power to control all outcomes in our country.

If you believe this to be true, then the only way to stop this disease of progressive socialism is to vote them out this November. Make sure that  not one single democrat gets elected or reelected for these are the individuals that carry the infections that threatens to destroy our way of life. To believe other wise is a willingness to accept a sickness that has no cure. 

The Real Cost of Fannie and Freddie
Source: Romina Boccia, "Revealing Fannie Mae's and Freddie Mac's Budget Costs: A Step Toward GSE Elimination," Heritage Foundation, March 16, 2014.
March 21, 2014

If American taxpayers could see the true cost of Fannie Mae and Freddie Mac, they would be much more likely to eliminate them, says Romina Boccia, a fellow in budgetary affairs at the Heritage Foundation.

Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) in the mortgage market, are exempt from federal budget rules and processes because they are treated as "off-budget" entities.

What this means is that the real cost of the two GSEs are kept hidden from taxpayers.

• Accounting gimmicks make the GSEs appear less problematic than they actually are.
• Currently, the cash-flow approach is used to show the impact of Fannie and Freddie on federal finances, which does not account for taxpayer exposure to risk.
• This is because the cash-flow method only looks at money that comes into the Treasury from GSEs, ignoring any costs of guaranteeing mortgage-backed securities.
• Were the GSEs on-budget, these costs would be acknowledged.

The GSEs appear to reduce the federal deficit using this method. This is not only misleading, but it encourages higher spending.

• Had the two been included as on-budget entities, the federal government would have reported $3.6 trillion in spending in 2013, with a $780 billion budget deficit.
• Instead, spending was underreported by $100 billion.
• Taxpayers are responsible for $4 trillion in GSE guarantees, yet those risks are not accounted for in budget reporting.

The Budget and Accounting Transparency Act of 2014 (H.R. 1872) would put Fannie and Freddie "on-budget," and would require fair-value accounting (which incorporates market risk) in order to correctly calculate their cost to taxpayers.

This is important because not only would it show to taxpayers the real cost of Fannie and Freddie, but it would demonstrate how eliminating the GSEs would do much to improve federal finances. Fannie and Freddie should be eliminated and a valid accounting of the two is the first step toward doing so.