Whose Money is it Really?

Whose Money is it Really?
Commentary by Sanford D. Horn

November 17, 2011

Fannie Mae, Freddie Mac and Solyndra. When it’s in government’s hands, it’s as good as fumbled.

Problem is, when a ball is fumbled it may change hands, but in terms of the two aforementioned government entities and one corporation, when the government fumbles, it is we the people who lose. We pay the price for such losses – and a hefty price it is.

Fannie Mae (Federal National Mortgage Association) is a 1938 government sponsored enterprise chartered by Congress… to support affordable homeownership. It is a national mortgage finance company, but does not offer home loans. Its goal is to help as many families as possible stay in their homes, prevent foreclosures and encourage sustainable lending. (www.fanniemae.com)

Freddie Mac (Federal Home Loan Mortgage Corporation), founded in 1970, is a stock-holder corporation chartered by Congress… to keep money flowing to mortgage lenders in support of homeownership. (www.freddiemac.com)

With all the complaining about the bonuses paid to the top dogs at Fannie and Freddie, it begs the question, where were the strings to accompany the rather large handouts when the government bailed out these two Congressional creations?

The Obama administration is guilty of precisely what former Speaker of the House Newt Gingrich accused government of doing: giving the money, then thinking about what strings should have been attached. Clearly, those strings should have been included, if the government is bailing out a company, entity or person, it has the right to tell the recipient how the money can or cannot be used. Paying $13 million in bonuses to 10 people for substandard work is unconscionable. After all, if they needed a government handout, they are not worthy of a bonus of even $5, let alone an average of $1.3 million. We the people paid for those bailouts and bonuses and have nothing to show for it but higher debt and a larger deficit, now over $15 trillion.

Now, if accepting of the premise that government can attach strings to bailout a corporation what about bailing out people? The next logical step is to define what food stamp recipients can and cannot buy using those government funds. The same should apply to welfare recipients. First, to receive welfare, one must pass periodic drug tests, at their expense. Additionally, welfare recipients will also need to be enrolled in some job training program. And, instead of extending benefits the longer someone is out of work, the term of receipt should be halved each time it is needed: 26 weeks, 13 weeks, seven weeks, four weeks, etc.

Participation by potential food stamp, welfare recipients or corporate bailout recipients is voluntary. They don’t have to adhere to the government strings. The choice is theirs.  We the people are the ones footing this bill. If not for the working Americans, non-working Americans would not have anyone to support them. Working Americans pay taxes into the system so that non-working Americans can extract taxpayer’s dollars from the system. If working Americans are subject to drug testing on their jobs, so too should those who would be the recipient of the workers largesse.

In the case of Solyndra, a solar power company founded in 2005 in Freemont, CA, it received a loan of $528 million or $535 million, depending upon the source of information, on March 20, 2009. Solyndra’s financing fell under the auspices of the 2009 stimulus law. Yet, on September 1 of this year, Solyndra laid off all its employees and filed for Chapter 11 bankruptcy, leaving the American people out in the cold. After all, the stimulus was a taxpayer funded operation.

When asked under oath before the House Energy and Commerce Committee, on Thursday, November 17, how much of the more than a half billion dollars would be recovered in the Solyndra debacle, Secretary of Energy Steven Chu responded “well, not very much,” in a rather matter of fact manner.

In addition to unilaterally making this loan grant to Solyndra, Chu did not conduct the proper due diligence and consult with his staff who had predicted back in 2009 that Solyndra would be facing cash flow problems. (www.newsmax.com) For this completely irresponsible behavior Chu needs to bite the bullet and resign his post as Energy Secretary.

The government – and this applies to any administration present and future, must be cognizant of whose money they are spending when bailing out companies allegedly too big to fail, bailing out citizens to unwilling to end their cycle of government dependence, and investing in companies with close ties to the administration, such as Solyndra, that are doomed to bankruptcy.

We the people must practice personal responsibility and simultaneously demand the government behave responsibly with our money. Remember, they work for us, not the other way around.

Sanford D. Horn is a writer and educator living in Westfield, IN.