Over the weekend, President Donald Trump reportedly suggested he was preparing to sell some or all of the about $30 billion in shares of the home mortgage Government-Sponsored-Entities (GSEs) Freddie Mac and Fannie Mae.

For today, let’s leave aside the utter unconstitutionality of Freddie and Fannie.  And instead examine why the Founding Fathers deemed such things as Freddie and Fannie unconstitutional: Their poisoning of the private sector.

Much ink has been spilled in detailing the causes of the 2008 global economic collapse.  What precipitated the entirety of it? Was Big Government colluding with the Big Banks to warp the U.S. housing market?

The Big Banks pay themselves fat fees on each home mortgage they sell.  But there are only so many people who qualify under traditional, rational lending standards.  

So in the early 2000s, the Big Banks started lowering the standards - until there were no standards at all.  Born was, amongst many other idiocies, the NINJA borrower, which stood for: No Income, No Job, (No) Assets.  You could have no gig, no stipend of any kind - and nothing to your name.  And get a mortgage.    

The Big Banks further hung out to dry the increasingly unqualified borrowers with Adjustable Rate Mortgages (ARMs).  Loans that started out with small interest rates for short periods - that then went up.  Often substantially.  Awful for the borrowers - great for the Big Banks.  About 35% of the mortgages at the time of the crash were ARMs. 

The Big Banks were issuing toxic mortgages as fast as the unqualified borrowers could sign them.   And the worse the loans the Big Banks were mass-extruding?  The bigger the fees they paid themselves.

These increasingly bad mortgages? They were pooled by the thousands into investment products called Mortgage-Backed Securities (MBS), which were then separately pooled into investment products called Collateralized Debt Obligations (CDOs).  Then bets - oops, I mean “investments” - were made upon the CDOs.   These were called synthetic CDOs.    

The corrupt ratings agencies corruptly, continually gave high ratings to make it all look good and keep the Big Bank money-making merry-go-round spinning. 

Oh: And these MBSs, CDOs and synthetic CDOs? They were purchased by people all over the planet, thus taking our titanic mess worldwide.       

But all of this utter nonsense begs a question: Why would the profit-seeking Big Banks make tens of trillions of dollars in home loans to people they KNEW couldn’t POSSIBLY pay them back? 

Because Freddie and Fannie:

“Fannie Mae and Freddie Mac, government-sponsored entities (GSEs), were pivotal in the American housing sector.

“Responsible for purchasing mortgages from lenders, they ensured liquidity in the market, enabling banks to issue more loans.” 

Get that?  

The Big Banks were making the toxic loans - but not keeping them on their books.   

They were paying themselves fat fees for signing up millions of unqualified borrowers.  And then almost immediately selling the bad loans to Freddie and Fannie.  That’s you and me - We the Sheeple.   

When the houses of cards collapsed, Freddie and Fannie were in possession of over $5 trillion in mostly toxic home mortgages.

That’s what’s known as privatizing the profits and socializing the losses.  This was the moral hazard Big Gov and the Big Banks created, with Freddie and Fannie as the crucial component to all of it.   

Oh: And for helping wreck the US and global economy?  Colluder Big Gov gave their co-colluder Big Banks a $29 trillion bailout.  The reverse moral hazard pays even better. 

And now - thankfully, FINALLY - President Trump wants to divest the U.S. of Freddie and Fannie.  

I can guarantee with moral certitude that private holders of Freddie and Fannie shares - purchased with their own private money? - will absolutely, positively not approve a single dollar being lent to anyone not qualified to borrow it, thereby ending the threat to We the Taxpayers and the U.S. and global economies.        

Editor's Note: President Trump is leading America into the "Golden Age" as Democrats try desperately to stop it.  

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