Rep. Jeb Hensarling: Fannie Mae, Freddie Mac Bailout is “The Mother of All Taxpayer Bailouts”
At the Heritage Action Conservative Policy Summit Monday, Rep. Jeb Hensarling (R-TX) 84% explained the benefits of the PATH Act and painted a picture of how direly change is needed:
We do not have a healthy and sustainable housing finance system because we lack both freedom and opportunity. So where are we today in America? Today hardworking taxpayers have been forced to engage in the mother of all taxpayer bailouts, nearly $200 billion to bail out Fannie Mae and Freddie Mac. That is unconscionable. Today taxpayers remain on the hook for more than five trillion — trillion with a T — in mortgage guarantees, roughly one-third the size of our entire economy weighing in at roughly $42,000 per American household… And today, because of the Dodd-Frank act think of the Obamacare for credit markets Washington elites decide who can qualify for a mortgage in who cannot.
The Heritage Foundation also notes:
One of the great ironies is that the government programs that were initiated in the early 1930s were nationalized versions of innovations that had long existed in the private market. Furthermore, nationalizing these advances did not eliminate financial risk, but only expanded risk and shifted it onto taxpayers.
Fannie and Freddie should be permanently shut down and should not be replaced with a smaller version of these GSEs under a new name. This is the only way to truly protect taxpayers and homeowners in the future.