In their joint oped article in the WSJ, McCain and Palin speak plainly and with conviction concerning the bailout of Fannie and Freddie. (see link above) They voice their concern on what this means for the tax payers and the need for, you guessed it, reform.
When they talk about down-sizing these two behemoths, I couldn't agree more. The government did what had to be done in regards keeping these two quasi-governmental institution sound. Investors around the world have a stake in our housing market through the purchase of bonds offered by these two companies, in the order of Trillions of dollars. If they were seen to be going under, not only would these investors bail on these bonds, but on US Treasuries as well, killing the Green back in the process. That was why this had to be done, not just for the mortgage market, but the US Dollar.
After this time of recovery, these two monsters of the mortgage market need to crawl into a nice quiet place and, like the two dollars George Baily puts in the Savings & Loan vault, have lots of babies. These babies should pop out of the governmental womb as soon as possible and the umbilical cores cut right away. Then let nature, survival of the fittest, take over so only the strong survive. Regulation on how mortgage products are offered and disclosed should be implemented, but the onus of sound financial judgement should ultimately be put on the borrower. He/she are the only ones that truly are responsible for putting themselves in debt, by signing the bottom line on that mortgage and note.
Reading this oped gives me hope that there will be a change in Washington, and I hope we will all hold their feet to the fire to stick to their call for reform and a true change in how our peoples government works.
Long Live the Republic!