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.

First, we need to understand just what the federal government is authorized to do.  John Munchmeyer put it quite well:

Article I, Section 8 of the Constitution specifically lists or enumerates the powers of the federal government.  They include a military, federal courts, etc.  The 10th Amendment clearly says that unless a function is specifically listed in the Constitution, it is left to the states or the people.  The founders set up a system where there was competition among the states for the best ideas.

On any given topic, some states would perform well, some would pass imprudent laws, and some would stay out of it completely (which is my particular favorite option).  But there was competition, and competition breeds excellence.

Yes, you would have a couple bad apples, but these would soon reform under the pressure of that competition.  It is better than focusing all of the power in Washington and having one huge rotten apple.  The top-down, centralized government model is a failure, just like it was in the former Soviet Union.

The guiding principle under which the founders drew up the Constitution was this little thing called “positive grant.”

What this means is quite simple. The federal government is authorized to exercise only those powers which are positively granted to it by the Constitution. If a power is specifically listed in the Constitution, the federal government can do it. And, vice versa.

This principle was so important to the founding fathers that they codified it in law as the 10th Amendment:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Simple, right? Well, you’d think so, but it’s in the nature of government – and politicians – to ignore any rules that limit their power. And that’s why we see both the 10th Amendment, and the entire Constitution, becoming more and more irrelevant in political discussions in Washington D.C.

In short, the 10th Amendment specifically limits the federal government to just those powers and functions named in the Constitution. And the 9th Amendment makes it clear that the people also have many other rights the government must respect, extending far beyond those actually named in the Bill of Rights:

“The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

A quick glance at most federal legislation would make virtually any honest person see that almost everything the federal government does is in direct violation of the Constitution.

This holds quite true for Freddie and Fannie – and for taking your money to keep these failing organizations in business.

Steve Austin chimes in as well:

I know this is going to be a shock to some, but the Federal Gov’t under the Constitution has absolutely no reason or excuse to involve itself in housing for the poor or to help people who got themselves into troubled mortgage loans.

They may have a tort, they certainly merit our concern, and perhaps the several states may wish to help them out depending of the gullibility of their citizenry and the political weakness of their legislatures, but, NO – there is no room for such as Title 8, Fannie Mae, Freddie Mac, or any of the literally dozens of housing program piglets suckling off the sow known as the U.S. Treasury. Not in this universe.

Any leader evn talking positively about this intervention would be a stranger to the Founding Fathers.

So, while many would argue that jobs will be saved, or that it’s “essential” to the economy – it doesn’t really matter if those positions are right or wrong.

Under the system of government that the founders enshrined in the US Constitution – the very existence of Freddie Mac and Fannie Mae (as anything other than a purely private business) is a violation of the Constitution.

Thus, taking more of your money to pay for its failures a far more in line with something that would’ve fit far better in a government under Joe Stalin than that of Jefferson, Washington and the rest.

The 10th Amendment

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”



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