Source: Cobden Centre
by Alex J Pollock
“The US housing finance system is unique in the world by being dominated by the Government-Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac. GSEs are a really poor and dangerous idea. By definition, they combine private ownership of their stock with special privileges, including most importantly a guarantee of their obligations by the government, i.e. the taxpayers. This guarantee is said to be only ‘implicit,’ but is fully real, as history demonstrates. It naturally leads to overexpansion of mortgage credit and inflation of house prices.” (07/10/25)