“To argue that the whole federal project of creating sources of liquidity to private mortgage lenders to dramatically increase home ownership rates in the US over this period was a categorical failure (or, for that matter, a good example of misguided socialist central planning as opposed to a judicious effort to ameliorate free market mechanisms to deliver a palpable improvement on home mortgage markets) is ludicrous.”
I have found that the debating tactic of stating that the other viewpoint “is ludicrous” just means you can’t refute it, but wish you could.
Fannie Mae and Freddy Mac existed to supply “the ability to obtain a 30-year fixed-rate mortgage with a low down payment… and the continuous availability of mortgage credit under a wide range of economic conditions.”
That is to help low-income earners get a mortgage they could not repay, for a house they could not afford. “This contributed to a decline in underwriting standards and was a major cause of the financial crisis.”
Fanny Mae was actually founded by the Democrat controlled Congress in 1938 as part of Roosevelt’s “New Deal”.
The fact that it took 70 years for this Government backed monopoly to take down the US banking system just shows the strength of the underlying Capitalist Market, but it also shows that Government interference will eventually poison the market, so that Billions of dollars in Federal bail-outs were required to save the Banking system from sub-prime, low-doc loans.