Tuesday, September 9, 2008

Bunning Rips Bailout Of Fannie And Freddie

"This takeover of Fannie and Freddie is a calamity for our free market system. This arrangement just props them up when they should be dismantled. Fannie and Freddie have been operating under a failed business model and it should not be allowed to continue" said U.S. Senator Jim Bunning in a prepared statement.

"By directly investing in the mortgage market, the Treasury Department is acting like it is a hedge fund. Building up a portfolio of mortgage-backed securities is part of what got Fannie and Freddie in trouble, and now Secretary Paulson is doing the same thing by using taxpayer dollars to prop up housing prices. This is not a free market system. Secretary Paulson is turning America into France of twenty years ago. Simply put, it is socialism.

"Over a month ago Secretary Paulson came before the Senate Banking Committee and told us that just because Congress gave the Treasury Department the authority to bail out Fannie and Freddie it didn’t necessarily mean it would be used. I knew better at the time, though, and pressed Secretary Paulson on the matter asking him why he would request such sweeping powers if he didn’t plan to use them. Not surprisingly the Treasury Secretary couldn’t answer my question. And now we know why.

"As I suspected back in July, Secretary Paulson knew more than he was telling us during his appearance before the Banking Committee. He knew that Fannie and Freddie were in an irreversible state of damage. He knew all along he was going to have to use this authority despite what he was telling Congress and the American people at the time. And yet Congress was foolish enough to give him a blank check for this irresponsible bailout. I hate to say it, but I told you so."

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