While one may wonder about the implications of the just announced "accelerated windown" of the GSEs, predicated in no small part by the surge in animosity between Tim Geithner and the FHFA's Ed DeMarco, there is one aspect of the announcement that is completely and utterly unambigious: as part of its justification to demand faster liquidation of Fannie and Freddie's "investment portfolio" Tim Geithner gave the following argument:
This will help achieve several important objectives, including... Ending the circular practice of the Treasury advancing funds to the GSEs simply to pay dividends back to Treasury
In other words not some fringe blog, not some "partisan" media outlet, not some morally conflicted whistleblowing former employee seeking immunity, but the US Trasury itself just admitted it had been engaged in circular check kiting scheme, which essentially has all the components of a Ponzi scheme in it, ever since the nationalization (about which there is no now doubt and which means the GSE's $6 trillion in debt is now fully on the Treasury's balance sheet) of Fannie and Freddie in 2008.
Transfer one more conspiracy theory into the conspiracy fact bin.
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If a St of Md agency (for instance) does not turn a profit or give anything back to the taxpayers, would that agency be considered a ponzi scheme?rarely do government agencies of any type give anything back to the public unless they are law enforcement.Therefore,by definition they are Ponzi schemes.I worked for an agency for 27 years.Not during that time period or during the 38 years since their inception have they turned a profit.Non profit by design.
ReplyDeleterarely do government agencies of any type give anything back to the public unless they are law enforcement
ReplyDeleteWhat, pray tell, does law enforcement give back to taxpayers?