We'll Protect Taxpayers From More Bailout

[Pressing-On]

Getting into more of the HOW now - great!

McCain/Palin '08

(excerpt)

We'll Protect Taxpayers From More Bailouts

By JOHN MCCAIN and SARAH PALIN
Today at 12:36pm

Enduring reform of Fannie and Freddie is a key first step. We will make sure that they are permanently restructured and downsized, and no longer use taxpayer backing to serve lobbyists, management, boards and shareholders.

Treasury has broadly followed the McCain plan, outlined months ago, and gets at the short-term heart of the problem. That plan reinforces the federal commitment to meet our obligations and get this mess behind us. It replaces management and board members. It requires that shareholders take losses first. It puts taxpayers first in line for any repayments. And it terminates future lobbying, which was one of the primary contributors to this great debacle.

Fannie and Freddie's lobbyists succeeded and Congress failed. Under our administration this will not happen again.

In the first 100 days of our administration, we will look at every agency and department and expenditure of the federal government and ask this simple question: Is it serving the needs of the taxpayer? If it is not, we will reform it or shut it down, and we will spend money only on what is truly in the interest of the American people.

http://online.wsj.com/article/SB1220...n_commentaries

[Pressing-On]

Huffington trying to find a Gaffe in Palin's speech on Fannie Mae and Freddie Mac.

Gov. Sarah Palin made her first potentially major gaffe during her time on the national scene while discussing the developments of the perilous housing market this past weekend.

Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had “gotten too big and too expensive to the taxpayers.” The companies, as McClatchy reported, “aren’t taxpayer funded but operate as private companies. The takeover may result in a taxpayer bailout during reorganization.”

http://www.huffingtonpost.com/2008/0..._n_124792.html

Stein quotes a couple of economists from liberal think tanks to try to back up the assertion that this is serious a mistake, insinuating it means Palin doesn’t know anything about either Fannie or Freddie. (Wait, I thought she just read her speeches?)

First off, yes these are not government agencies, but since we’re nitpicking here, they’re not “private” either. They are publicly traded companies. Second, they are GSE’s — Government Sponsored Entities and, as such, their debt has the implicit guarantee of the Federal government, which means the taxpayer assumes their risk. Risk does carry a price — the bond markets depends on this fact. And it is fair to say — regardless of what liberal economists may think — that the risk Freddie and Fannie pose to the American taxpayer is “too expensive” — especially at a time when the Federal government was talking about bailing them out within a matter of days.

Oddly, perhaps not understanding that it undermines his criticism, Stein includes this quote from Gerald P. O’Driscoll, an economist with the Cato Institute: “[Fannie and Freddie] were not taxpayer funded. They had taxpayer guarantee, which is worth something, especially in the stock market…”

Well, if the taxpayer guarantee is “worth something,” who finances that value? The taxpayer of course.

To read more: http://spolitics.com/blog/category/2008-election/

They just keep trying! lol