Forget the Banks: Bail Out the Poor

Ask anyone why the government doesn’t build housing for every person in this country who needs it, and you’ll get the answer you always receive. Ask why the government doesn’t turn around tomorrow and set up a universal healthcare plan and there’s that answer again. Ditto for making education and public transportation free. It’s always the same stock response: Our government doesn’t have the dough.

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Sponsoring Recklessness

When do the words “not guaranteed” actually mean “guaranteed”? Whenever the mortgage giants Fannie Mae and Freddie Mac are involved. The two companies have long been required to tell investors that their securities are not guaranteed by the federal government. But in the financial markets everyone has always assumed that this demurral was just window-dressing, and everyone, it turns out, was right. Last week, when fears [read more]

by James Surowiecki | newyorker.com | posted: July 28, 2008

‘Let them fail,’ says Libertarian Party

Government bailouts of Freddie and Fannie like giving candy to problem children

Washington, D.C. - “Let them fail,” says Libertarian Party spokesperson Andrew Davis, referring to the mortgage institutions Freddie Mac and Fannie Mae, who the Bush administration has said it plans to rescue from financial collapse.

“Let them fail, and let them learn from their mistakes on their own dime,” says Davis. “Bailing out these two institutions will only delay the inevitable outcome of any financial firm insulated from the market by government backing. The long run damage of continuing a policy of bailouts far exceeds any short term woes in letting the market consume failing institutions.”

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