NEW YORK: In a country that holds itself up as a citadel of free enterprise, Washington has morphed from being the lender of last resort into effectively the only resort for home loans for millions of Americans engaged in the largest transactions of their lives.Before, the government’s more modest mission was to make more loans available at lower rates. Now it is to make sure the loans that matter most to middle class Americans are made at all.The new reality is scorned by libertarians and conservatives, who fear intrusions by the state in the market, and by populists and progressives, who rue a society in which education and housing increasingly rest upon the government’s willingness to finance it.”If you’re a socialist, you should be happy,” said Michael Lind, a fellow at the New America Foundation, a research institute in Washington. “But you should really wonder whether you want people’s ability to pay for housing and college dependent on the motives of people in Washington.”

International Herald Tribune

The proposed bailout of Fannie Mae and Freddie Mac is the latest in the race to see how much industry government can partially nationalize with taxpayer subsidies and keep them afloat.  With a Democratic Congress and a neo-con White House we are becoming less of a free market nation and more of a European Socialist market that is propped up by government funding.  The Federal government has already injected itself in the insurance industry, providing nationalized flood insurance for people naive enough to build their homes in flood plains.  Charlie Crist has been pushing Congress to pass a sort of nationalized hurricane insurance program, much like the NFIP.

And this isn’t even the worst of it.

The U.S. Treasury Department’s plan to shore up Fannie Mae and Freddie Mac is an “unmitigated disaster” and the largest U.S. mortgage lenders are “basically insolvent,” according to investor Jim Rogers.

Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson’s request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. Goldman Sachs Group Inc. analyst Daniel Zimmerman predicted the mortgage finance companies’ shares may fall another 35 percent.

“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.”

Bloomberg

The dollar is already in a perilous position.  The more it declines, the higher oil prices are going to rise, thrashing our economy even harder.

We, the taxpayers, have already bailed out Bear Stearns.  Where does it end?  Rogers is correct in the Bloomberg article (if you read the whole thing).  Freddie Mac and Fannie Mae should go bankrupt from the careless mistakes they have made and that would be the case if Washington doesn’t step in to save the day.  How will constantly infusing them with more and more of our money going to turn things around?

Free market Capitalism in this country has been slowly going by the way side and just took a huge leap forward in that direction.  A precedent has now been set, a bad one.  Should we nationalize the oil industry next since that is so important to our economic structure?  The cries are already out there to do so.  Even closer are talks of government taking over the health care industry.  Say goodbye to our Capitalist land of freedom, innovation, and opportunity.  It’s all but a memory, pieces of the past that aren’t being picked up.