Tax & Spend Administration?

Bureau of Economics

Last night Secretary Paulson announced that the U.S. would seize control of Fanny & Freddy Mae, the two largest loan corporations in America.  Those two are so large that they could not fail, and yet there was the distinct possibility.  And so the government stepped in.  The terms of the seizure are not yet clear, but it’s sure to cost tax payers a bundle, although it will surely be less than if the loan system failed.

The administration probably did the responsible thing at this point in the game, by acting to see that chaos didn’t prevail in the loan market.  However, all of their protestations of keeping government small should be taken with a very very very small grain of salt, given that this administration will have spent more money and placed America in more debt than the previous two administrations combined (and perhaps the 2nd Reagan administration).  Also, stricter regulation of the loan market would have prevented such silliness in the first place, proving that some regulation actually saves us money.

So when Republicans say they’re for smaller government, be sure to ask who’s paying the bill for Fanny and Freddy.

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