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Hernando Today

Bailouts, Bailouts And More Bailouts

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By DONALD J. MYERS

A Mind of My Own

Published: July 18, 2008

The latest word is that the government will now bail out Fannie Mae and Freddie Mac. These are government organizations that provide home loans to individuals who would otherwise not be able to buy a home. They are totally run by the government and pay no taxes.
It is reported that they provide more than 50 percent of all mortgage loans.
Let me see if I have this right. They pay no taxes, are under no supervision by organizations that oversee other lenders and yet they are going broke.
What is wrong with this picture?
It is an organization that is under the control of the government and as such it does not seem to be accountable to the normal restrictions of a regular business. Could it be that the usual lending organizations do not offer loans to people who are poor risks and have poor credit ratings?
Our federal government seems to be in the business of saving people and organizations that make poor decisions. I look at our state in Florida where the state is responsible for more than half of the insurance policies of homes. I already pay an extra charge added to my home insurance policy to cover the current state insurance responsibility — an added tax that was added without my input and is not shown as a tax on the annual billing.
What would happen if a devastating hurricane were to hit a portion of Florida with huge negative results? I suspect that all homeowners would be assessed an additional surcharge to cover the states responsibility.
Again, what is wrong with this picture?
The state should not be the major insurer for homes, but because it has instituted certain restrictions on insurance companies, many of these insurance companies have left. Not only should the state not be the largest home insurer, it should not be in the business at all.
When will we realize that government-run organizations do not perform well? Look at the government-run schools. They are a disaster, and Florida is no exception. Look at our postal system — in the past one could expect the mail to be delivered on time and cheaply. Now we are lucky if it ever gets there.
As citizens, we take different risks and hope that our selections produce positive results. If we are correct, the results are positive and we see a positive return. In many cases, we are wrong and must pay the consequences of poor decisions. We lose money!
Most of us learn from our mistakes and try never to repeat them, but the government continues to make the same ones over and over and we, the taxpayers, pay the price.

Donald J. Myers, a retired colonel in the U.S. Marine Corps, is a regular columnist for Hernando Today. He lives in Spring Hill and can be contacted at DMyersUSMC@aol.com.

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