Freddie and Fannie Bailout: Expensive to Taxpayers, and Destructive of Liberty.

by Rep Ron Paul

Statement before the US House of Representatives on HR 3221 July 24, 2008

Madam Speaker,

For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing.

This crisis would force Congress to choose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct.

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Freddie and Fannie: Unconstitutional

Bailouts of the failing Freddie Mac and Fannie Mae are not only unwarranted and unwise – but the existence of both these quasi-government/private organizations is unconstitutional from the very beginning.

When looking at the constitutionality of government programs, it’s not necessary to be a law student, or an “expert” of any kind.  The founding fathers wrote the Constitution in plain English – so that ordinary people would be able to understand the law…that governs the government.

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