McCain on Fannie and Freddie
Check this out: The Corner on National Review Online
I didn’t know that in 2005 McCain talked about problems with these two behemoths and introduced legislation for reform. Sadly, that legislation was killed by Chris Dodd (D-Connecticut.)
The conventional wisdom, and frankly it is one that I shared, is that McCain is pretty weak on economic issues. This shows that while he might not be the greatest economist ever, he has at least gotten some stuff right here just as he was correct about the Surge in Iraq.
(via Instapundit)
… and as yet not one commentator (that I have heard or read) has pointed out the long term effect of these multi-billion bail-outs.
Not that anyone wants to know, but until those funds are retrieved the rate of inflation is going to increase. How do I define inflation? It is the decline in the buying power of the dollar; my dollar, US dollar, Aus dollar, British pound whatever.
How can the handouts be retrieved? Well economically it is quite simple, but politically it is very difficult.
You can regain the hand-outs from the direct beneficiaries in exactly the same way as any other loan. The difficulty is that this will impact directly the amount of money available for lending - ostensibly to businesses to make new business but just as likely to the worker down the road so that he can buy that $5000 flat screen tv… The effect is a slow burn on the fuse that the handouts tried to extinguish.
You can regain repayment of the handouts (let’s be honest, that is what they are) by balancing the government’s fiscal budget. To achieve that requires two very bitter political pills - either a cut in government expenditure, or an increase in taxes.
Now, where do Mr McCain and Mr Obama stand on those two matters? I doubt that either will ever say the truth - it would be political suicide.