The announcement that Fannie Mae and Freddie Mac have been taken over by the US government because they were 'too big to fail' is just the latest in a series of taxpayer bailouts. This time we're in for more than $200 billion to bail out these firms and stabilize the market-especially overseas markets so they will continue to invest in the US.
Ironically, the heads of these firms will walk away with millions of dollars in their pockets while pension funds, mutual funds and common stock holdings of the little guy get decimated. Despite these firms acting so recklessly whereby top management pocketed millions in profits, they're more than comfortable with socializing the losses on to the American taxpayer. So much for a free market, huh?
Enough already. It's time for the American taxpayer to stand up and insist that the Congress get a backbone and create a solution that works FOR the taxpayer instead of against it. There is historical precedent for this-and one that's already proved successful---create a publicly owned bank. In doing so, we would set up a system where money is circulated in such a way that we could avoid inflation and fund government operations without taxes. For more details, see www.webofdebt.com.
The current mess-not only with Fannie Mae and Freddie Mac but Bear Stearns, UBS, Northern Rock bank (nationalized in England) and many others -- exposes a major problem of the private banking system, where those who run it stand to profit despite violating any type of business controls. Because they keep getting bailed out, there's no incentive for them to act responsibly and so they don't. As a result, many banks sit on the brink of failing. The taxpayer cannot be subsidizing the wealthy few who are laughing all the way to the bank on the back of the taxpayer! The private banking system benefits so few, while a public banking system can benefit the many.
We've had a public banking system before: in the 1930's, as a result of the worldwide Depression, the Reconstruction Finance Corporation was created. The RFC was a wholly government owned agency that performed the function of a public bank. It was successful at pulling the US out of the Depression as well as financing World War II. And amazingly, it turned a small profit. That profit gets returned to the American taxpayer while providing a banking system that is effective in funding mortgages, infrastructure like bridges and roads and other services necessary to keep our economy vibrant.
We can take this step again. In doing so, we could take over Fannie Mae and Freddie Mac and end up in the plus column instead of where we are now-watching $200 billion get siphoned out of your children's future and out of our economy. Congress could take this step instead of the one the Treasury Department announced over the weekend. Call your congressman today and ask "Isn't it time to open up the Reconstruction Finance Corporation again?" In doing so, we tell Congress "no thanks" on the bailout, we choose public banking instead. Hey-it's our money, and our choice.