COMMENTARY | In a surprising move, Fannie Mae has asked taxpayers for $7.8 billion in aid to help offset $7.6 billion in losses.
This is unreal to me. I can't imagine giving Fannie Mae another dime of taxpayer money. In 2008, Fannie Mae was bailed out along with Freddie Mac to the tune of $169 billion. Fannie Mae was also appointed a financial regulator to prevent another bailout in the future. That bailout was one of the biggest in 2008.
To date, Fannie Mae has received $112.6 billion. That's a financial drain, and Fannie Mae still hasn't pulled itself out of unprofitability as evident by the company's latest request. It's not taxpayers' fault that Fannie Mae is still unprofitable. It is Fannie Mae's fault that Fannie Mae is still unprofitable, and if Fannie Mae were a private business, it would be out of business. Let's not forget the hundreds of banks and businesses that have shuttered their doors in the last three years: Lehman Brothers, Bear Sterns, Circuit City, Linens And Things, Borders and many more. Those businesses were not profitable and closed as a result. Fannie Mae should not be any different.
What's even more shocking is that both Fannie Mae and Freddie Mac think they deserve $12.8 million in bonuses for their top 1- executives, and it was approved by Congress. Like Sen. John Barrasso said in the article by Fox News: "Why Does Obama continue 'to reward failure.'"?
Under no circumstances should the executives at either company receive millions of dollars in bonuses while requesting $7.8 billion in additional funds. If Fannie Mae doesn't have the money to continue operations, than it does not have the money to hand out bonuses. It's that simple.
While I understand why we bailed Fannie Mae out the first time, I do not see any benefit to giving a failing company more taxpayer money. The initial fear was that if Fannie Mae and Freddie Mac failed, the housing market would completely explode into chaos.
The housing market is in chaos as evident in an article by the Associated Press . It was reported that home prices fell in nearly three-fourths of all US cities during the last financial quarter. That's obviously why Fannie Mae is requesting another $7.8 billion dollars, but it is not a good reason to give Fannie Mae more money. In fact, it's a good reason not to give that company more money. Fannie Mae should have braced itself against any more financial losses, reduced more staff, and taken other cost cutting measures. The economy has not improved in three years. There are very few reasons to believe that it's going to improve in the next quarter much less in the next three years.
In short, Fannie Mae needs to be told to sink or swim on its own. This taxpayer is tired of bailing to big to fail companies out. It needs to stop. I'd rather see my tax money spent on programs and projects that would truly benefit the American people.
- Freddie Mac
- Fannie Mae