Wednesday, September 29, 2010
"America’s hidden debt"
Our elected officials, through their actions and inactions, have destroyed the American economy.
No doubt, it can recover, but, not until the citizens revolt in the voting booth...
No doubt, it can recover, but, not until the citizens revolt in the voting booth...
I found this at the end of an article by Joe Tauke at DailyCaller.com:
"...while the CBO is at least slightly more realistic than the OMB, the bottom line is that neither budgetary entity has addressed the five trillion-pound gorilla in the room. The situation is perhaps best summarized by the twin stances of Orszag, who left the CBO to become Director of the OMB. In 2008, CBO Orszag wrote, 'Fannie Mae and Freddie Mac should be directly incorporated into the federal budget.' In 2009 and 2010, OMB Orszag refused to do exactly that.
So how much money will ultimately be needed to make Fannie and Freddie whole? That depends on how much their assets are actually worth. In June, the New York Times reported that the enterprises were taking an average loss of over 40% every time they sold a property. The government hopes that by extending its life support operations indefinitely, more and more Americans will eventually be able to pay their bills and the GSEs will be able to simply hold most of their assets to maturity, many years down the road. But hope is not a budget item, and deteriorating economic conditions suggest that total losses will continue their march towards the imposing trillion-dollar mark that publications including Bloomberg and Business Insider have said could be breached.
Such a price has been given an appropriate label by Edward Pinto, a former chief credit officer at Fannie Mae. Addressing the possibility of a full commitment to cover every last cent owed by Fannie and Freddie, Pinto said simply, 'It is the mother of all bailouts.'"
