The government’s "$6.3 trillion scam"
Courtesy of Tim Iacono at The Mess That Greenspan Made
Jonathan Weil must have had little wisps of steam coming out of his ears as he read the email response to his queries from the White House Office of Management and Budget and affixed a title to yesterday’s commentary at Bloomberg.
Obama’s $6.3 Trillion Scam Is America’s Shame
Look through President Barack Obama’s proposed 2011 budget, and you’ll see a line calling for a $235 million increase in the Justice Department’s funding to fight financial fraud. Lucky for them, the people who wrote the budget can’t be prosecuted for cooking the government’s books.
Whether on Wall Street or in Washington, the biggest frauds often are the perfectly legal ones hidden in broad daylight. And in terms of dollars, it would be hard to top the accounting scam that Obama’s budget wonks are trying to pull off now.
The ploy here is simple. They are keeping Fannie Mae and Freddie Mac off the government’s balance sheet and out of the federal budget, along with their $1.6 trillion of corporate debt and $4.7 trillion of mortgage obligations.
Never mind that the White House budget director, Peter Orszag, in September 2008 said Fannie and Freddie should be included.
It quickly progresses to calling the U.S. housing market a giant Ponzi scheme that sucks in America’s newlyweds via the homebuyer tax credit and ends with a lame excuse from the OMB about why they won’t include Fannie and Freddie in the government’s official budget – it would be "too disruptive to change how they are accounted for".
Maybe the world should stop looking at Greece and start looking at the U.S.
