Fannie and Freddie to End Philanthropy

After requiring hundreds of billions of dollars in 2008 – 2010, why do Fannie Mae and Freddie Mac have philanthropy programs at all? The WaPo reports that those program may come to an end in the next few years. It’s about time. The problem is not with charity or the laudable aims of the programs Fannie and Freddie have been generously funding. The problem is with the continued reckless spending of the two GSEs whose daily activities – philanthropy, lobbying, political activism – have so far strayed from their original charters. Leave aside their faulty accounting and their conflicts of interest. Leave aside their negligent practices and irresponsible executive compensation. Just look at their current bottom lines. If the federal government were the least bit committed to preventing another housing bubble and to truly reining in both needless government spending and the prevailing Washington attitude that seeks to do everything for everyone, then they could start by liquidating Fannie and Freddie and starting to clear the housing market. Instead, we debate on whether or not a GSE with no money should continue to give away money that they don’t have. It is unfortunate for the laudable charities that they have supported, but those charities have been fed far too many free lunches over the years. It needs to end.

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Filed under Domestic Politics, Role of Government

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