The Fall of the Empire

July 14th, 2008 by Eric Cope

The BBC has an article regarding Fannie Mae and Freddie Mac. While this article’s slant is ridiculous at best, it does paint a great picture of what happens when governments artificially create a market. The US government artificially created a market of lower (than commercial banks can offer) interest rate mortgages, artificially inflating the mortgage market. Fast foward 70 years, and Fannie Mae and Freddie Mac, both government-backed (that is pronounced taxpayer-backed) organizations have 5 trillion dollars in debt that is guaranteed by the US government. That is $5,000,000,000,000! The national debt (which does not include this debt, which is ridiculous) is $9 trillion.

Lets summarize:

  • the government artificially created a market of mortgages under the guise of the American Dream
  • the government manipulated interest rates creating the balloon
  • the government manipulated interest rates busting the balloon
  • now US taxpayers must guarantee $5 trillion dollars of terrible debt at the point of a gun

That is $5,000,000,000,000 / 300,000,000 US citizens = just under $17,000 per citizen.

When empires are held up by artificial flying buttresses, eventually the load will come crashing down. These socialistic burdens have grown tremendously large. If we don’t do something about it, they will come crashing down, hurting more people than 9/11, and we did it to ourselves. I see the cracks, do you? Only the rich will survive. The poor, the middle class, will pay for these atrocities. Are you ready to pay YOUR debt?

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