Fannie Mae and Freddie Mac - "The Federal Government continues to spend money it does not have." - John Cornyn (R-TX)

The recent collapse of Fannie May and Freddie Mac is a very complicated matter. While there is little disagreement that a "bail-out" was necessary to prevent a run on the banks or other fiscal disorder, the implications of the fall-out are open for discussion.
Yesterday, John Cornyn, Senator from Texas, said the following on the floor:

"I wish to join my colleague from New Hampshire in raising some alarm--not intemperate, not hysterical alarm, but alarm nonetheless--about the recent reports that the Federal deficit has now risen in excess of $400 billion. Of course, what that means is that the Federal Government continues to spend money it does not have, and I think the American people are rightfully concerned that we are on a course of significant fiscal irresponsibility for which a tremendous price is going to be paid by our children and grandchildren.

The Senator from New Hampshire mentioned the fact that here we are in September, and this Congress, under the Democratic control conferred upon them in the last election, has yet to pass a single appropriations bill. I know that in the blame game--which in Washington, DC, is a world-class sport--our colleagues on the other side of the aisle like to point to the President of the United States as the person responsible for the high budget deficit. But the fact is that the President can't appropriate a penny of money. The President does not have that authority under the Constitution of the United States. Only Congress can appropriate money, and Congress is the one that should bear the responsibility for this tremendous state of fiscal neglect and irresponsibility that brings us here today.
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It is a troubling sign that our deficit has ballooned from $161 billion to more than $400 billion. Yet what do we find out yesterday or the day before but that the Federal Government is now going to have to take over, in essence, Freddie Mac and Fannie Mae. This move could potentially cost taxpayers as much as $200 billion more on top of the $400 billion deficit.

Since the 2006 election, Democrats have been in control. And this year alone, spending has increased by 8.3 percent. Now, I don't know any business, I don't know any family who increased their spending 8.3 percent from last year to this year. Only the Federal Government--which, of course, prints money, which is then added to the deficit and the bill passed on to our children and grandchildren--only the Federal Government could get away with that."
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I have written a letter to the Attorney General of the United States asking him to conduct a criminal investigation into the activities of the corporate officers and anyone else who may have contributed to the overstatement of assets on the books of Fannie Mae and Freddie Mac and to make sure a thorough criminal investigation is undertaken and that those responsible for violating any of the criminal laws of the United States be held accountable."

Here is a link to his letter if you are interested in reading it -
http://cornyn.senate.gov/public/index.cfm?FuseAction=ForPress.NewsReleases&ContentRecord_id=4d0d8574-802a-23ad-43bf-527b0dff0dbc&Region_id=&Issue_id=


Does anyone remember the savings and loan crisis of the 1980's and 1990's?

Here is another interesting article from the WSJ titled, "Why No Outrage?"
http://online.wsj.com/public/article_print/SB121642367125066615.html

I suggest you contact your representative and have them support a full investigation into the financial collapse of these institutions.