As the crush of entitlement obligations worsens, this would be a very valuable message for the Right to begin trumpeting....
[O]riginally, [Fannie Mae] was a government agency endowed with the authority to buy mortgages, in the hope that this would expand the supply of credit to homeowners. It wasn’t until 1968 that Fannie was privatized. (Freddie Mac was created two years later, and was private from the start.) The main reason for the change was surprisingly mundane: accounting. At the time, Lyndon Johnson was concerned about the effect of the Vietnam War on the federal budget. Making Fannie Mae private moved its liabilities off the government’s books, even if, as the recent crisis made clear, the U.S. was still responsible for those debts. It was a bit like what Enron did thirty years later, when it used “special-purpose entities” to move liabilities off its balance sheet.
The S&L bailout. Enron. Worldcom. Arthur Anderson. The subprime crisis.
They are drops in the bucket compare to the debt being piled up by the federal government. And yet, Congress allows the Federal Government to get away with accounting practices that would land a CEO in jail.
Congress should be forced to abide by the rules that they apply to the accounting industry. Nothing would tie down the politicians like a bit of accounting sunlight.