Fannie and Freddie were originally government owned and operated agencies.
And they were making a small but comfortable profit.
Then someone got the idea of spinning them off. Which led to deregulation, bad loans, and collapse.
If they'd stayed as government services, this wouldn't have happened, as nobody's allowed to speculate or profit from a government agency.
Likewise, Social Security. Originally, all those deposits were kept in a private fund.
Somebody got the bright idea of stealing that money and putting it in the General fund.
If the money had stayed where it was, SS wouldn't be in any trouble at all.
We need to reverse that course, and put all future deposits back in the private fund. Too late to demand the money back, but not too late to reverse the ongoing drain.
Any business whose model is to sell products or services to other companies, and it has nothing to do with banking, or insurance, generally can do fine.
It's only when a business starts to gamble on moving pieces of debt around that we run into problems.
That's when a little Federal regulation can prevent disasters like the banking collapse.
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ninetydegrees
Fannie and Freddie
on 2009-09-23 09:01 pm (UTC)Fannie and Freddie were originally government owned and operated agencies.
And they were making a small but comfortable profit.
Then someone got the idea of spinning them off. Which led to deregulation, bad loans, and collapse.
If they'd stayed as government services, this wouldn't have happened, as nobody's allowed to speculate or profit from a government agency.
Likewise, Social Security. Originally, all those deposits were kept in a private fund.
Somebody got the bright idea of stealing that money and putting it in the General fund.
If the money had stayed where it was, SS wouldn't be in any trouble at all.
We need to reverse that course, and put all future deposits back in the private fund. Too late to demand the money back, but not too late to reverse the ongoing drain.
Any business whose model is to sell products or services to other companies, and it has nothing to do with banking, or insurance, generally can do fine.
It's only when a business starts to gamble on moving pieces of debt around that we run into problems.
That's when a little Federal regulation can prevent disasters like the banking collapse.