Monday, September 08, 2008

Econ 101 for Sarah

The problem with Freddie and Fannie was that they needed more regulation to assure they backed only well-qualified loans. Until now they haven't cost the taxpayer anything and it's not yet certain that they will.

Governor Palin evidently does not understand that Fannie and Freddie are not big, expensive government bureaucracies, but are the source of funding for the majority of mortgages in this country.

So when she says she'll make them smaller, does she intend to have less liquidity so mortgages are harder to get even for qualified borrowers?

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